Download Annex 1: North/South Co-operation on the island of Ireland

Lisbon Agenda
Integrated Guidelines for Growth and Jobs
Ireland
Implementation of National Reform Programme
2nd Annual Progress Report
October 2007
Contents
1
Overview .......................................................................................................................... 3
1.1
Introduction ...............................................................................................................................................3
1.2
The Economy .............................................................................................................................................3
1.3
National Development Plan 2007-2013 (NDP) ................................................................................4
1.4
Spring European Council 2006 Priorities ...........................................................................................4
1.5
Linkages with Social Policy .....................................................................................................................5
1.6
Cohesion .....................................................................................................................................................5
1.7
North-South Cooperation .....................................................................................................................6
1.8
Future Implementation of the Lisbon Agenda ...................................................................................6
2
Macroeconomic Policy Objectives ................................................................................. 7
2.1
Overview ....................................................................................................................................................7
2.2
Stability ........................................................................................................................................................7
2.3
Sustainability ...............................................................................................................................................8
2.4
Resource Allocation .................................................................................................................................9
2.5
Wage Developments ............................................................................................................................ 11
2.6
Policy Coherence ................................................................................................................................... 13
2.7
EMU ........................................................................................................................................................... 14
3
Structural and Market reforms (Microeconomic guidelines) ..................................... 15
3.1
R&D / Innovation ................................................................................................................................... 15
3.2
Knowledge Society and eGovernment Policy ................................................................................ 21
3.3
Business and Industry ............................................................................................................................ 25
3.4
Business Environment and Better Regulation ................................................................................. 29
3.5
Sustainability ............................................................................................................................................ 31
3.6
Internal Market ....................................................................................................................................... 35
3.7
Competition Policy ................................................................................................................................ 37
3.8
Supporting Infrastructure and Cross-Border Projects................................................................. 39
4
Employment Guidelines ................................................................................................ 42
4.1
Labour Market Priorities 2005-2008 ................................................................................................ 42
4.2
Labour Market Performance ............................................................................................................... 42
4.3
Flexicurity ................................................................................................................................................ 44
4.4
Flexible and reliable contractual arrangements .............................................................................. 45
4.5
Comprehensive lifelong learning (LLL) strategies.......................................................................... 47
4.6
Effective active labour market policies (ALMP) ............................................................................. 51
4.7
Modern social security systems ......................................................................................................... 54
4.8
Gender Equality ...................................................................................................................................... 57
4.9
Economic Migration and Integration ................................................................................................. 58
Annex 1:
North/South Co-operation on the island of Ireland ....................................... 62
Annex 2:
Implementation of the Strategy for Science, Technology and Innovation .. 64
Annex 3:
Transport 21 Developments ............................................................................ 70
Annex 4:
National Indicators for European Employment Strategy.............................. 71
Annex 5:
Expenditure on Employment and Training Supports .................................... 72
2
1 Overview
1.1
Introduction
The National Reform Programme (NRP) produced in October 2005 last brings together a broad range of
policies and initiatives, the implementation of which aims to sustain Ireland’s strong economic growth and
employment performance as its overall contribution to the re-launched Lisbon Agenda, focusing particularly on
growth and jobs, over the period to 2008.
Following elections in May 2007, a new Government assumed office in June 2007 on the basis of an Agreed
Programme for Government setting out in clear and ambitious terms its shared vision for Ireland’s
development over the coming five years. The new Government is determined to maintain the success of the
social partnership process, which serves as Ireland’s National Reform Partnership for the purposes of the
Lisbon Agenda. It is committed to working with the social partners to ensure the full implementation of the
Towards 2016 agreement negotiated in 2006, the seventh successive such agreement building on our wellestablished model of stakeholder engagement.
As set out in last year’s progress report, the Towards 2016 agreement provides, for the first time, a ten-year
framework for supporting sustainable improvements to quality of life. Key to this sustainability is the
deepening appreciation it reflects of the strong interdependence between our social, economic and
environmental goals.
There is a comprehensive and integrated set of national strategies under the Towards 2016 framework,
including the National Reform Programme, the National Development Plan and the National Action Plan for
Social Inclusion. The primary focus in the period ahead is now on implementation of these complementary
strategies.
In the particular areas of economic growth and job creation, Ireland remains fully committed to the Lisbon
Agenda goals, and the emphasis of this report is on key developments to this end during the past 12 months,
working with the social partners under the Towards 2016 framework. Ireland believes that the challenges and
opportunities presented by an increasingly knowledge-intensive and interconnected global economy can best
be dealt with by a strong Europe and full implementation of the Lisbon Agenda.
1.2
The Economy
Headline economic growth in 2006 was strong, with GDP growth of 5.7%. However, over the short-tomedium term, growth is likely to moderate somewhat, as the currently high level of residential construction
activity reverts back to more sustainable levels. The strong economic performance in 2006 was mirrored in
employment growth of 4.4% in the year while unemployment remained low, also at 4.4%.
The guiding principles for fiscal policy as set out in the new Programme for Government are to:

Keep the budget in broad balance and fully within our commitments under the Stability & Growth
Pact.

Retain the flexibility to deal with any future shocks.

Set aside a minimum of 1% of GNP per annum to provide for the future pensions of today’s workers.

Implement a series of significant and sustainable increases in key public services such as pensions,
health and schools.

Keep the overall tax burden low and implement further changes to enhance the rewards of work
while increasing the fairness of the tax system.
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1.3
National Development Plan 2007-2013 (NDP)
Full implementation of the National Development Plan 2007-2013 is the first priority of the new
administration. This was produced in January 2007, setting out an investment framework consisting of €100bn
of capital and €84bn of current expenditure. The Exchequer accounts for €143bn of the €184bn with the rest
coming from PPPs, commercial State Bodies and other sources.
NDP investment is split into five Priorities which are further split into Programmes and Sub-Programmes. The
Priorities are:

Economic Infrastructure: Involving investment of some €54.7bn in areas such as transport, energy,
environmental services and communications;

Enterprise Science & Innovation: Comprising investment of some €20.0bn in Science Technology &
Innovation along with a number of sectoral development programmes including enterprise, agriculture
and tourism;

Human Capital: Consisting of investment of some €25.8bn in training and skills development, school
modernisation and higher education;

Social Infrastructure: Investment of some €33.6bn in areas including housing, health infrastructure,
justice and sports, culture, heritage and community infrastructure; and

Social Inclusion: Investment of some €49.6bn. This Priority includes programmes for children,
unemployed, lone parents, older people, people with a disability and groups such as migrants and
travellers.
In addition to the above sectoral Priorities, the NDP also sets out investment frameworks for regional
development, environmental sustainability, development of the rural economy and all-island co-operation that
are to be incorporated into the implementation of the NDP.
1.4
Spring European Council 2006 Priorities
Progress over the past 12 months in relation to the four priority action areas agreed at the 2006 Spring
European Council is reflected as follows:

Investing more in knowledge and innovation: We are investing €8.2 billion in Science,
Technology and Innovation over the lifetime of the new National Development Plan 2007– 2013.
This represents a tripling of the spend provided for under the previous Plan, bringing Ireland into line
with R&D performance in leading countries while enhancing the development of a knowledge-based
economy. A renewed emphasis is placed on knowledge-driven industries and on the framework
conditions which will stimulate growth, productivity and employment into the future. Significant
increases in funding, provided through Enterprise Ireland, Science Foundation Ireland (SFI) and the
Industrial Development Authority (IDA) are aimed at exploring, promoting and developing the
networks that bring companies and researchers together.

Unlocking business potential, especially of SMEs: Ireland is rated as a highly attractive location
internationally in which to start a business. The Global Entrepreneurship Monitor 2006 ranked
Ireland 2nd in the EU and 7th among OECD countries for entrepreneurial activity. Our favourable
climate for entrepreneurship reflects benign business framework conditions such as relatively low
taxation, a low regulatory burden, and relatively easy access to finance. The implementation of the
recommendations of the Small Business Forum is also progressing, including establishment of the
Management Development Council to benchmark current management development provision;
additional fiscal measures to attract financing for start-ups and to ease the administrative burdens on
the SME sector; and enhancement of the Business Expansion Scheme (BES) and Seed Capital Scheme
(SCS).

Greater adaptability of labour markets based on flexicurity: The labour market continues to
change at a fast pace due to the impact of globalisation and demographic factors. Specific targets and
investment programmes to support participation by people of working age in the labour market are
outlined in Towards 2016 and the National Development Plan 2007-2013, including a new Social and
Economic Participation Programme. Adaptability is key for both employers and employees and this is
4
now being encapsulated in the concept of flexicurity. Key developments include increased emphasis
on promotion of training and skills development; enhanced engagement with the unemployed and
inactive to ensure access to employment; progressive changes to the tax and welfare systems to
increase the rewards of work and to ensure an adequate income for the unemployed; and greater
focus on employment rights compliance.

1.5
Energy and climate change: The Agreed Programme for Government endorses the
comprehensive range of measures set out in the White Paper on Energy Policy and the
complementary National Climate Change Strategy 2007-2012, both produced in March 2007. We
have set the target that one third of all electricity production will be generated from renewable
sources by 2020, with an interim target of 15% by 2010, while biofuels will represent 5.75% of our
transport fuel market by 2009 and 10% by 2010. We are also committed to introducing a Sustainable
Travel and Transport Action Plan (STTAP) in 2008 to reverse unsustainable trends in our transport
sector and help it evolve along a more efficient pathway. In relation to the Kyoto Protocol, we have
shown clearly the measures by which we will meet our 2008-2012 obligations; how these measures
position us for the post-2012 period; and further identified the areas in which further measures are
being researched and developed to enable us to meet our 2020 targets as adopted by the European
Union. The Government has set a clear target for this administration of a reduction of 3% per year
on average in our greenhouse gas emissions.
Linkages with Social Policy
The National Action Plan for Social Inclusion 2007-2016, Building an Inclusive Society, (NAPinclusion), which
was launched in February 2007, sets out a wide-ranging and comprehensive programme of action to address
poverty and social exclusion. The plan, together with the social inclusion commitments in the national social
partnership agreement, Towards 2016, and the National Development Plan 2007-2013 (NDP), constitute
Ireland’s strategic process for promoting social inclusion. Close linkages have been developed between the
NAPinclusion and NRP processes, recognising that economic growth and social development are interconnected and mutually reinforcing policy goals.
The NAPinclusion, following the lifecycle approach, offers a comprehensive framework for implementing a
streamlined, cross-cutting and visible approach to tackling poverty and social exclusion at all stages of the
lifecycle, viz. Children, People of Working Age, Older People and People with Disabilities. Policies contained in
the plan which affect a range of groups across the lifecycle are detailed in a separate chapter on Communities.
The overall goal of the NAPinclusion is: To reduce the number of those experiencing ‘consistent poverty’ to between
2% and 4% by 2012, with the aim of eliminating consistent poverty by 2016, under the revised definition. In order
to achieve this overall goal, the plan has a strong focus on actions and targets with 12 high level goals and 153
targets and actions, spanning all stages of the lifecycle. These are designed to mobilise resources to address
long-standing serious social deficits, and ensure that a decisive impact on poverty is made over the lifetime of
the plan.
The final chapter of the NAPinclusion details improved institutional structures and arrangements which are
being put in place to underpin the effective implementation, monitoring and ongoing development of the
Government’s social inclusion agenda.
1.6
Cohesion
Cohesion policy for 2007 to 2013 is also explicitly linked with the National Reform Programme as an
instrument for promoting sustainable and balanced growth across the European Union. Ireland’s National
Strategic Reference Framework (NSRF) and Operational Programmes (OPs) reflect the overall goals of the
Lisbon Agenda and Ireland’s National Reform Programme. The NSRF and OPs build on the aims of Towards
2016 and have a strong focus on competitiveness and supporting and enabling dynamic Regions. To this end,
Ireland has earmarked 83% of its expenditure on actions that support and promote the Lisbon Agenda which is
in excess of the 75% target set out in the regulations.
5
1.7
North-South Cooperation
A significant aspect of the NRP is the common contribution by the British and Irish Governments regarding
improved co-operation within Ireland, North and South. The two Governments affirmed their commitment to
the full implementation of the Good Friday Agreement and the early restoration of the political institutions of
the Agreement, including the Northern Ireland Executive and the North/South Ministerial Council.
Following an historic agreement by the political parties in March 2007, devolution was restored in Northern
Ireland on 8 May 2007. The European Commission has also set up a Task Force on Northern Ireland
following the visit of President Barroso to Belfast.
Following the restoration of the Northern Ireland Executive, the Irish Government looks forward to a further
strengthening of co-operation in a range of areas where there are mutual benefits, including in the context of
Lisbon goals. Key developments over the past 12 months are captured in Annex 1.
1.8
Future Implementation of the Lisbon Agenda
Along with the significant developments across the policy spectrum in Ireland that are reflected in this report,
there is now growing evidence of progress being made towards the Lisbon goals across Member States
generally. Three years is a relatively short period for the National Reform Programmes and it is inevitable
that, in many cases, measures introduced during the period may take time to yield substantial results. Ireland
believes that the primary focus in the coming period should continue to be on implementation of the Reform
Programmes. The integrated guidelines have provided a useful framework within which reforms and their
implementation can take place.
Furthermore, the annual review cycle provides an adequate mechanism for particular areas to be highlighted,
emphasised and reinforced as necessary across the European Union, as evidenced already by the appropriate
elements included in the Spring Council conclusions of 2006 and 2007. Ireland believes that, rather than seek
to reopen or renegotiate the guidelines which were agreed in 2005 and are now beginning to show evidence
of real progress across the EU, we should continue with the method that has served us well over the past two
years. This will allow an appropriate balance to be struck between continued implementation on the one
hand, and appropriate emphasis or prioritisation, in response to emerging and changing circumstances, on the
other.
Ireland would also welcome an elaboration, under the Community dimension, of the external aspects of the
Lisbon Agenda. We remain of the view that, essentially, the Lisbon Agenda is about the Union’s position in,
and relationship with, the wider, global community. Whilst progress on internal reforms within the Member
States and across the Union is welcome, we must continue to focus, and indeed increase our attention on, the
challenges and opportunities of globalisation for the EU.
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2 Macroeconomic Policy Objectives
2.1 Overview
On a headline basis the Irish economy remained strong in 2006, with GDP growth of 5.7%. However, growth
was somewhat unbalanced; domestic demand was the main driver of growth with a minimal contribution from
net exports. On a sectoral basis, growth was mainly driven by higher output in construction and services.
Stockbuilding was also particularly strong. Reflecting the labour-intensive nature of construction and services,
employment rose strongly last year, with total employment rising by 4.4%. Due to the sectoral composition of
output growth, the rise in labour productivity was modest.
It now appears that the short- to medium-term outlook for the Irish economy has disimproved somewhat
since the last NRP, as the currently high level of residential construction activity reverts back to more
sustainable levels. This will exert a negative drag on the overall growth rate and may be associated with slower
employment growth and some increase in unemployment.
The public finances remain in a healthy position with a general government surplus of 0.9% of GDP projected
for 2007 while the ratio of debt-to-GDP remains at a relatively low level. The strong fiscal performance must
also be seen in the context of relatively high capital spending, with the Government spending around 5% of
GNP per annum on adding to the stock of public infrastructure. On the downside, the inflation performance
has deteriorated. On a harmonized basis, inflation averaged 2.7% in the nine months of the year, 0.8
percentage points higher than the equivalent for the euro area.
Against this backdrop of a slowing economy, some downside risks remain; both internal and external. A small
globally-integrated economy such as Ireland would not be immune from a deterioration in the international
economic climate. In particular, Ireland is very exposed to developments in the US economy and to
movements in the euro-dollar exchange rate. Domestically, a sharper than expected fall in housing output,
which, given the exposure of the economy to the construction sector – which currently accounts for over
one-in-eight workers – would have a not insignificant impact on growth and employment. The potential for a
further loss in competitiveness is also a matter of concern.
2.2 Stability
Guideline 1: Guarantee the economic stability for sustainable growth
In keeping with the Government’s commitment to maintaining a stable macroeconomic environment and
sustainable public finances, Ireland continues to adhere to the close-to-balance requirements of the Stability
and Growth Pact through prudent budgetary planning. The general government balance has been in surplus for
the last four years and the debt-to-GDP ratio has fallen steadily, to 25.1% at end 2006.
This has facilitated the maintenance of a low level of taxation, the protection of competitiveness and the
maximisation of Ireland’s economic potential. This is evidenced by the success of the Irish economy which
continued to perform strongly in 2006 - growth was 5.7% in GDP terms. However, over the short-to-medium
term, growth is likely to moderate somewhat, as the currently high level of residential construction activity
reverts back to more sustainable levels.
Employment growth has been very strong in recent years leading to an unemployment rate of 4.4% in 2006.
This is a level which can be considered practically full employment. The employment rate amongst 15-64 year
olds was 68.6% in 2006. Ireland has an open labour market policy, attracting considerable inward migration
7
from other EU member states, which has contributed to restraining wage and inflationary pressures in an
economy at full employment.
In 2006 Irish HICP diverged from the euro area average, running at an average of 0.5 percentage points higher.
In 2007 to date, Irish inflation has remained 0.8 percentage points higher than the EU average, due mainly to
higher services inflation.
The Government is continuing to address our remaining infrastructural deficit. This is seen as essential to
secure economic stability and support the future competitiveness of the Irish economy. Significant resources
are being allocated towards enhancing the productive potential of the economy, through substantial investment
in the public capital stock. Public investment will be around 5% of GNP over the course of the new National
Development Plan, which runs to 2013.
2.3 Sustainability
Guideline 2: Safeguard economic and budgetary sustainability, a prerequisite for more jobs
The importance of ensuring that the economy will be in a position to meet anticipated long-run fiscal pressures
has become embedded in the Irish policy making process. Reflecting this, a range of initiatives designed to take
account of long-term spending trends, along with the welfare needs of older members of society, have been
put in place. An overview of new and ongoing developments is provided below. In addition, the Government
remains committed to prudent budgetary planning, maintaining a low debt burden, and improving employment
and labour force participation rates so as to support the economy’s longer term growth potential.

Partial pre-funding of future social welfare and public service pension costs has continued with the
payment of a statutory contribution of 1% of GNP into the National Pensions Reserve Fund. The
value of the Fund at end-June 2007 was €21,032 million or approximately 13% of GNP.

Work in respect of public service pension reforms was further advanced during 2007 with a view to
potentially bringing additional measures before Government in due course.

The Government is committed to producing a Green Paper on Pensions in accordance with the social
partnership agreement Towards 2016. The Green Paper will be a discussion document covering all
aspects of the pension system – social welfare, public service and supplementary provision. It builds
upon the National Pensions Review and the Special Savings for Retirement Report published by the
Pensions Board in 2006. The sustainability of Ireland’s pension system from a financial, economic and
social perspective remains the key objective. The Green Paper will be published in October 2007.

On top of existing incentives to encourage private pension provision, the new Programme for
Government undertakes to develop proposals in the context of the Green Paper on Pensions, and in
consultation with the social partners, to provide an SSIA type scheme to make supplementary pension
provision more attractive to those on lower incomes. The National Pensions Policy Initiative (1998)
set a target to raise supplementary pension coverage to 70% of the workforce aged 30 and over. The
QNHS ‘Module on Pensions’ published by the CSO for the last quarter of 2005 indicates that
coverage for the target group amounted to 61.8%, an increase of 4 percentage points since 2002.

In line with the Government’s commitment to increasing State social welfare pensions to €200 per
week by 2007, State old age pension rates now stand at €209.30 for the State Pension (Contributory,
maximum rate) and €200 for the State Pension (Non-Contributory). The recent Programme for
Government commits to further increasing the basic State Pension by around 50% to at least €300
per week by 2012.
8

An Actuarial Review of the Social Insurance Fund will be published in October 2007. The Social
Insurance Fund is subject to five-yearly actuarial reviews to ensure that its contribution to long-term
budgetary policy remains effective.

The Inter-Departmental Group of senior officials which was jointly established by the Ministers for
Health & Children and Social & Family Affairs is continuing to work on proposals for the future
financing of long-term care. Drawing on work carried out by this group, and in line with principles
agreed with the social partners under Towards 2016, the Government has announced the ‘Fair Deal’,
a new scheme for long-term care which will be introduced in January 2008.

Additional steps to increase the share of the population at work and improve the productive capacity
of the economy have also been taken. These include the National Development Plan 2007-2013 which
was launched in January 2007. The investment in infrastructure, education, science technology and
innovation set out in the Plan will help to strengthen the knowledge base and productive capacity of
the economy so that it is better equipped to meet the challenges ahead. Moreover, under the Social
Inclusion Priority of the Plan, some €1.3bn has been earmarked for the National Childcare Investment
Sub-Programme. This incorporates the National Childcare Investment Programme (NCIP) 2006-2010
which will create 50,000 childcare places, thereby supporting female labour force participation. As the
NCIP only runs until 2010, progress in addressing childcare needs will be reviewed in tandem with the
Mid-Term Review of the NDP. This will inform any subsequent policy response.
2.4 Resource Allocation
Guideline 3: Promote an efficient allocation of resources, which is geared to growth and jobs
As evidenced by the wide range of policies and initiatives set out in Ireland’s National Reform Programme and
2006 Progress Report, the Government is committed to promoting the efficient allocation of resources (a
commitment to promoting the efficient allocation of resources in line with the Broad Economic Policy
Guidelines for 2005-2008 was also given in the December 2006 Update of Ireland’s Stability Programme Section 5.5). Over the past year, the various measures put forward to promote growth and manage growth
enhancing public spending have been further progressed and a number of new initiatives have been announced.

Firstly, a Central Expenditure Evaluation Unit (CEEU) has been established in the Department of
Finance to promote best practice in the evaluation and implementation of programme and project
expenditure across all Government Departments and Public Sector Agencies. Roll out of the CEEU’s
work programme, including implementation of a programme of spot checks of capital projects to
assess compliance with the VFM frameworks for capital expenditure, has begun.

As part of the ongoing reform of the budgetary process, the Tánaiste and Minister for Finance
announced in September 2007 that ‘all new spending measures, as well as tax changes, will be brought
together and announced as one in a unified way on Budget Day, instead of on a piecemeal basis, as at
present’.

The National Development Plan 2007-2013 was launched by the Government in January 2007. This
sets out a comprehensive framework whereby resources of €184 billion will be invested in developing
the national economic and social infrastructure. The NDP encompasses five sectoral Priorities –
Economic Infrastructure (€54.7bn); Enterprise Science & Innovation (€20bn); Human Capital
(€25.8bn); Social Infrastructure (€33.6bn); and Social Capital (€49.6bn) - along with investment
frameworks for regional development, environmental sustainability, development of the rural
economy and all-island co-operation.
9

The latest multi-annual capital envelope, announced in conjunction with the new National
Development Plan 2007-2013, provides for €76.2 billion in capital expenditure during this period. On
this basis, capital investment is projected to be sustained at an average of 5.4% of GNP over the
period.

Transport 21 - a major investment programme for transport infrastructure - was announced in
November 2005. It provides for investment of some €34 billion and is being implemented through the
rolling multi-annual capital envelopes.

The new National Development Plan 2007-2013 allocated a total of €8.2 billion to further support
and underpin the Strategy for Science, Technology and Innovation over this period.

Following on from the adoption of the Planning and Development (Strategic Infrastructure) Act in
2006, An Bord Pleanála have received a significant volume of requests for pre-application
consultations in respect of major road, rail, electricity, and strategic gas infrastructure developments,
relating to major NDP, Transport 21 and other projects. The 2006 Act provides a mechanism
whereby planning decisions on relevant major infrastructure projects can be accelerated and has
facilitated An Bord Pleanála becoming, in essence, a one-stop shop for planning decisions on strategic
infrastructure developments. A parallel initiative is underway by the President of the High Court to
provide greater efficiencies in the handling of judicial review cases by the High Court.

New public procurement arrangements for construction contracts have been developed and
introduced from the start of 2007. The new contracts apply to all public sector bodies. A centralised
training programme for key public sector personnel was completed in February 2007 and a
Framework Agreement for the training of other public sector personnel has been put in place.
Furthermore, a two day seminar on the new contracts has been provided to all key private sector
professional practices engaged by public bodies to provide professional services on capital works
projects. Discussions are ongoing with a view to developing a contract clause that would oblige
contractors to respect existing statutory pay and employment conditions in the performance of public
sector service contracts. It is expected that these discussions will be concluded by the end of 2007.

The revised Value for Money measures for major capital projects, ICT projects and consultancies are
being implemented by all Departments and Agencies. They include provision, amongst other things,
for fixed price contracts as the norm, no extension of service contracts without tendering if the
extension is more than 50% of the original contract or exceeds €250,000, full cost benefit analysis of
capital projects over €30 million, audits of major capital projects, the appointment of an individual as
project manager for major capital and ICT projects and peer review of major ICT projects.

Some 90 Value for Money Reviews have been approved by Government. They will have to be
completed by Departments and Offices by set deadlines in the period 2006 to 2008. The topics for
review focus on significant areas of expenditure and major policy issues and, as a general rule, have an
indicative minimum coverage of 10-15% of each Department’s and Office’s 2005 Budget. The
completed reviews will be published and submitted to the relevant parliamentary select committee
for consideration.

Finally, Departments prepared and submitted Annual Output Statements with their Estimates for the
first time in 2007 and set out the target outputs, and in some cases outcomes, to be achieved in the
year for the funds allocated via the Estimate. These Statements were considered by the Dáil
(parliament) as part of its consideration of the 2007 Estimates. From 2008 onwards the Output
10
Statements will set out actual outturns against the previous year’s output targets and new targets for
the year under consideration.
In time these measures are expected to lead to the following results:

More efficient and effective management of capital programmes and projects as a result of greater
medium-term budget certainty under the capital envelopes.

The revised capital appraisal guidelines, together with the strengthened Value For Money measures
and the capacity-building effect of the CEEU, are resulting in more rigorous selection of projects and
more effective and efficient management of capital programmes and projects, ICT projects and
consultancies generally.

The move to fixed price contracts will result in a shifting of risk, greater cost certainty, value for
money and cost effective delivery of public capital projects.

The new VFM Policy Reviews will also strengthen the arrangements for securing better value for
money and improve decision making in regard to the allocation and prioritisation of expenditure.

Reform of the Estimates and Budget Process will increase Departments’ and Agencies’ accountability
to the Oireachtas (parliament) and the taxpayer in regard to the prioritisation and allocation of public
expenditure.

Under Transport 21 the transport system in Ireland will be developed over the period 2006 to 2015.
The twin challenges of past investment backlogs and continuing growth in transport demand will be
addressed to increase accessibility, ensure sustainability, expand capacity, increase use and enhance
quality.

The Strategy for Science, Technology and Innovation 2006-2013 will, among other things, lead to
increased investment in R&D, increased business expenditure on R&D and a doubling in Ireland’s
output of PhDs.

The National Development Plan sets out a strategy and objectives, along with planned investment, for
the next seven years to promote sustainable growth, economic and social development and national
competitiveness.
With respect to the structure of taxation, Ireland’s tax system aims to promote equity, employment,
enterprise and efficiency. Over the past year, income tax policy has continued to focus on maintaining full
employment and strengthening the competitive position of the economy by means of alleviating the tax
pressure on labour. A particular emphasis has been placed on the low paid and the elderly. To this end, the
entry point to taxation and PRSI was increased above the annualised value of the minimum wage in Budget
2007. This, along with other measures, will remove around 97,300 from the tax net, increasing the incentive
for those on lower incomes to engage in employment. The income tax exemption limits for those aged 65 and
over were also raised in the Budget, while the higher rate of income tax was reduced to 41%.
Looking ahead, Programme for Government priorities include ensuring that low earners remain outside the
tax net and that average earners are not liable to tax at the higher rate.
In addition, the Government has announced that it will establish a new Commission on Taxation to review the
efficiency and appropriateness of the Irish taxation system. It will include an assessment of the balance achieved
between taxes collected on income, capital and spending.
2.5 Wage Developments
Guideline 4: Ensure that the development of salaries contributes to macroeconomic stability and
growth
11
The Government remains committed to macroeconomic stability and sustainable growth. The economic policy
outlined in the Programme for Government published in June 2007, acknowledges that it is through improved
competitiveness and innovation rather than low wages that sustainable growth will be achieved going forward.
Employment growth in 2006 was strong and unemployment remained low at 4.4%. Average earnings increased
in nominal terms across all sectors, although the increase in real terms was fairly modest, reflecting relatively
high inflation last year. Labour supply was boosted by net inward migration which helped to alleviate shortages
in the labour market. Job creation is expected to moderate over the period 2007/2008 which should dampen
expectations for further earnings growth.
The need to keep pay increases in line with those of our major competitors is well recognised in Ireland. For
this reason the latest social partnership agreement Towards 2016 allows for a 10% pay increase over a 27month period, but provides that no further claims for such increases, other than those outlined in the
Agreement, will be made during the period of the Agreement.
The Towards 2016 pay increases also apply in the public service, though the first phase increase was not paid
to public servants until 1 December 2006, six months after the private sector. A crucial aspect of any public
service pay increase is the linkage of payment to the delivery of verifiable, specific change under a
modernisation programme for each sector of the public service and the maintenance of industrial peace. This
criterion will also apply in respect of the new benchmarking exercise (the periodic measurement of pay rates
of public service jobs against pay rates for similar jobs in the private sector) currently underway. The Public
Service Benchmarking Body is due to report back at the end of the year.
Recognition of the need to maintain competitiveness going forward is also reflected in the reconstitution of
the high level anti-inflation group under the terms of Towards 2016. This group consists of employer and
trade-union representatives and relevant Government Departments. Its purpose is to discuss ways to address
Ireland’s relatively high inflation rate in line with shared commitments. Representatives of the Competition
Authority and the Office of the Director of Consumer Affairs can also be invited to participate, as appropriate.
Above all, the authorities recognise the need for wage developments to be closely aligned with productivity
trends. In this context, the growth rate of labour productivity slowed in the first half of this decade – over the
period 2000-2005, an average growth rate of just 1.5% per annum was recorded (GNP per hour worked
basis). This was mainly due to a shift in economic activity to more labour-intensive sectors (construction and
services). Some improvement was recorded last year, and as new housing construction as a percentage of
overall output reverts to more normal levels, the outlook is for a continuation of this going forward.
Although continuing structural change within the economy, particularly the relative growth of services, is likely
to limit the rate of productivity growth, a range of Government policies is focused on supporting the drivers of
productivity.

Firstly, in terms of human capital, ongoing investment in education is expected to result in the
proportion of the labour force with upper-second or third-level education increasing from just over
half at the beginning of the 1990s to three-quarters by 2012.

Secondly, in terms of increasing the amount of capital per worker, considerable investment in the
public capital stock is taking place. Over the period 2007-2013, public infrastructural spending will
average 5.4 per cent of GNP each year under the Government’s National Development Plan.
12

Finally, in relation to multi-factor productivity, some progress has been made in strengthening
competition in various markets (examples being electricity supply and telecoms), and this can be
expected to generate productivity gains going forward.
2.6 Policy Coherence
Guideline 5: Strengthen the consistency of macroeconomic, structural and employment policies
Ireland is continuing to make steady progress in reforming its product, capital and labour markets. The various
policies pursued in this respect over the past year are set out below. These have sought to increase the
flexibility, mobility and adjustment capacity of the economy so as to promote competitiveness and support
long-term growth.

Reflecting the Government’s commitment to strengthening the physical and human capital base, the
National Development Plan 2007-2013 was launched in January 2007. In tandem with existing
measures such as the R&D tax credit, the investment in infrastructure, education, science technology
and innovation set out in the Plan will help to strengthen the knowledge base and productive capacity
of the economy, thereby sustaining economic growth and employment into the future.

Additional steps to promote competition in the services sector have been taken. The Competition
Authority published its final report on competition in the legal professions in December 2006,
followed by a report on the private health insurance market in January 2007. In April 2007 the
enforcement powers of the Commission for Communication Regulation (COMREG) were increased,
while the enactment of the Pharmacy Act saw the removal of barriers to entry to this market.

With regard to financial services, the adoption of a personal account switching code for retail
customers in 2005 has lead to increased competition between banks, with more banks now offering
current accounts free of charge. In July 2007 new regulations in respect of non-life insurance policies
came into effect. In addition, the Financial Regulator implemented a number of the recommendations
made by the Competition Authority in its 2005 report on the non-life insurance market. Other
recommendations will be considered in the context of a review scheduled to commence in late 2007.
The domestic legal framework for covered bonds was also updated in 2007. This should help to
ensure that Ireland continues to be an attractive location from which to issue covered bonds.

Moreover, the integration of Irish financial markets with those of the EU has continued, aided by
Ireland’s membership of the single currency and the timely and effective transposition of EU Financial
Directives. The Capital Requirements, Reinsurance and Markets in Financial Instruments Directives
were implemented over the course of 2006/2007. Ireland is also involved at EU level in the
preparation of a new solvency regime for the insurance industry.

The process of liberalising network industries has been further progressed. Ireland’s retail gas market
was opened up to competition in July 2007 which means that all gas customers are now eligible to
switch their supplier. The creation of an all-island wholesale electricity market is also at an advanced
stage, with the market expected to ‘go live’ on 1 November 2007.

Following the publication of a Green Paper on Energy Policy last October, the Government launched
its Energy White Paper in March 2007. In April, the National Climate Change Strategy 2007-2012 was
published. These measures are aimed at supporting sustainability and underpinning Ireland’s
competitive position going forward.
13

With regard to public sector reform, the drive towards value for money and budgetary reform is
ongoing. Moreover, the trend of relating increases in public sector pay to flexibility, the satisfactory
implementation of the modernisation agenda and the maintenance of industrial peace has been
maintained as part of the current social partnership agreement, and also underlies the benchmarking
exercise now underway.

Finally, additional measures to encourage participation in the labour market have been put in place.
These include a rise in the entry point to taxation and PRSI above the value of the minimum wage and
an increase in the income tax exemption limits for those aged 65 and over. In February 2007 a
package of reforms, comprising a revision of the work permit scheme for migrants and a Green Card
system, was introduced. Progress in developing a comprehensive childcare infrastructure has also
been made. Building on the childcare initiatives set out in Budget 2006 and Towards 2016, some
€1.3bn has been allocated under the NDP 2007-2013 to the National Childcare Investment SubProgramme. This reflects the Government’s commitment to limiting costs pressures and increasing
the number of facilities available to parents so as to support female labour force participation.
2.7 EMU
Guideline 6: Contribute to the dynamism and smooth operation of EMU
Ireland continues to be a strong performer in relation to the Stability and Growth Pact (SGP). The Council
Opinion on Ireland’s 2006 Stability Programme described the medium-term budgetary position as sound and
the budgetary strategy as a good example of fiscal policies conducted in compliance with the SGP.
The Programme for Government published in June 2007 reaffirms Ireland’s commitment to the Stability and
Growth Pact which continues to provide our framework for medium-term budgetary policy.
Ireland is already achieving its medium term budgetary objective of close to balance while accommodating a
high level of public investment. This is necessary to address the infrastructure needs of the economy and to
support the growth and employment objectives set out in Ireland’s National Reform Programme. Indeed,
public investment over the coming years will be some 5% of GNP which is around twice the EU average.
The public finances remain in a healthy position, with a general government surplus of 0.9% of GDP projected
for 2007.
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3 Structural and Market reforms (Microeconomic
guidelines)
The Programme for Government 2007-2012 recognises the central importance of competitiveness and
innovation as critical to Ireland’s future prosperity. We have placed a renewed emphasis on knowledge driven
industries and the framework conditions which will stimulate growth, productivity and employment into the
future. The committed investment in R&D and the strategies and Programmes of our enterprise-support
Agencies are highly geared towards delivering these objectives.
3.1
R&D / Innovation
Guideline 7: Increase and improve investments in research and development, in particular in the
private sector, with a view to establishing a European area of knowledge.
Guideline 8: Facilitate all forms of innovation.
Reinforcing Innovation Policy
Ireland has set a goal to become a leader in innovation and has committed a budget of €8.2 Billion under the
National Development Plan 2007-2013 and the Strategy for Science, Technology and Innovation 2006-2013
towards achieving this goal. This investment is situated in a matrix of policy instruments which embraces a
broad–based understanding of innovation and how interlinking policy areas can leverage our investment.
To deepen the sources of our competitiveness, we recognise that it is essential to maintain the best possible
conditions across all policy spheres for supporting and sustaining innovation. In order to underpin this policy,
in July 2007 the Government appointed Mr Michael Ahern, TD as a new Minister for Innovation Policy at the
Departments of Enterprise, Trade and Employment and Education and Science.
The Minister has been mandated to promote a multi-faceted innovation agenda in support of enterprise and
the knowledge economy and to coordinate those efforts across relevant Government Departments.
Key policy areas have been identified as follows:




Promoting entrepreneurship and enterprise development
Skills, learning and education
Investment in research and development tailored to the needs of enterprises
Promotion of a broader environment for innovation.
Within this policy framework, we have identified key drivers of innovation performance where we are taking
action in order to improve our overall innovation performance.
15
Key Drivers of Innovation










3.1.1
Building a World-Class Research System
Enterprises and Higher Education: Developing Closer Relationships (i.e. from
research to the marketplace)
Investing in People: Lifelong Learning and the Skills Strategy
Public Procurement and Innovation (better access by SMEs)
Driving Regional Innovation through Networks, Clusters and Gateways
Intellectual Property
Innovation in Services
Innovative Enterprises in an Entrepreneurial Society
Strengthening Partnership with Workplace Innovation
Competition and Better Regulation as drivers of innovation
Strategy for Science, Technology and Innovation (SSTI) 2006-2013
Following the launch of the Strategy for Science Technology and Innovation in 2006, the Government
committed substantial funding in the National Development Plan 2007-2013 to implement the Strategy. Over
the lifetime of the NDP, the State will invest €6.1 billion in STI as detailed in the programme areas below.








World Class Research STI
Enterprise STI
Agri-Food Research
Energy Research
Marine Research
Geo-science
Health research
Environment Research
€3.46 billion (SFI €1.46bn + PRTLI, IRCHSS, IRCSET)
€1.29 billion (EI, Awareness, Tyndall Institute)
€ 641 million
€ 149 million
€ 141 million
€ 33 million
€ 301 million
€ 93 million
The investment in human capital, physical infrastructure and commercialisation of research outlined above is
complemented by investment in initiatives set out in the NDP allocations for Higher Education and the IDA.
Taking account of these amounts, the global NDP investment in STI amounts to €8.2 billion.
The National R&D System: Update on performance
Latest data shows that good progress continues to be made in improving Ireland’s knowledge economy
performance. Total R&D spending across all performing sectors (GERD) increased by 14.3% to €2.33 billion in
2006. With robust R&D spending gains now outpacing economic growth, the overall R&D intensity ratio
climbed to 1.56% of Gross National Product in 2006, ahead of the 1.32% GERD intensity ratio recorded at the
start of the Lisbon process in 2000. The rapid progress in R&D spending has also allowed for a narrowing of
the spending intensity gap between the EU and OECD averages.
R&D performed in the business sector (BERD) rose to an estimated €1.56 billion in 2006, almost double the
level recorded in 2000. The latest 17.3% annual increase between 2005 and 2006 facilitated a rise in the BERD
intensity ratio to 1.05% of GNP. Higher Education sector performed R&D (HERD) climbed to just over €600
million in 2006, over 2.5 times the €238 million HERD recorded in 2000. The HERD intensity ratio at 0.40% of
GNP is now in line with the EU and OECD averages. Finally government sector performed R&D (Goverd)
rose to €170 million in 2006 (0.11% of GNP).
Funding for R&D activities was sourced mainly from businesses, which contributed 65.5% of funds for R&D in
2006. This was in line with the target for two-thirds of total R&D investment to come from businesses. The
next largest source of funding for R&D came from the public sector which funded 32.8% of R&D investments.
A further 1.7% of R&D activity was financed from other sources.
16
On the human resources side, the number of employed researchers has risen dramatically since 2000, in
parallel with the strong increases in R&D investment. The ratio of full-time adjusted equivalent researchers per
thousand in employment has risen from 5.0 in 2000 to 6.0 in 2006, and is now in line with the EU average and
only slightly below the OECD average.
3.1.2
Progress on Implementation
Governance
Following adoption of the SSTI, the work of overseeing and directing its full implementation is in operation.
This requires driving the effective operation and interaction of the coordination and governance structures. A
Cabinet Subcommittee on STI has been established. The work of the Interdepartmental Committee on STI,
chaired by the Department of Enterprise, Trade and Employment, which reports to the Cabinet SubCommittee is in progress. The Sub-Committees of the Inter-Departmental Committee, the Higher Education
Research Group, Technology Ireland and the Health Research Group are also fully engaged. In addition the
Chief Scientific Advisor to the Government has been appointed and the Advisory Science Council are fully
engaged in their work programmes aimed at advising on the delivery of key aspects of the strategy.
Considerable progress has been made on developing Key Indicators and a system of measurement against
which the implementation of the STI Strategy can be monitored and evaluated. This will enable an interim
target for the level of investment in R & D in 2010 to be determined.
More detailed information on the implementation of the SSTI is set out in Annex 2. Key actions since the last
report are highlighted as follows:

At December 2006, Science Foundation Ireland (SFI) was funding over 1,300 awards across all SFI
programmes, representing a substantial commitment of over €680 million. In 2006 alone, SFI
approved 463 new awards involving a financial commitment of almost €135 million. Payments in
respect of new and existing awards during 2006 amounted to €140 million and were made to 15
institutions throughout the country. Additional investment of €48 million was committed so far in
2007 in a range of world class research projects in key areas of Biosciences and Bioengineering and
Information and Communication Technologies, across a number of Higher Education Institutes.

The Programme for Research in Third Level Institutes (PRTLI) continues to make significant
investment in infrastructure. A further €230 million research investment was announced in 2007
under the fourth cycle of the PRTLI.

The Strategic Innovation Fund (SIF) was introduced in 2006 and €130 million is to be allocated under
the second call. Through an internationally peer-reviewed competitive tender, the SIF will support
Universities in increasing their capacity to produce high quality 3rd and 4th level outputs.

Innovation Vouchers: A €10m fund to assist small Irish firms to become more innovative was
launched. Enterprise Ireland is managing the initiative and will allocate 200 innovation vouchers worth
€5,000 each in this initial pilot phase. Small companies with a business opportunity or problem they
want to explore can exchange the voucher for advice and expertise from knowledge providers.
Competence Centres: A call for expressions of interest in the establishment of Competence
Centres was launched. Groups of companies with common research interests that are active R&D
performers or that have committed to increase their performance in R&D or that have a clear
strategic plan to engage in R&D were invited to make submissions. Competence Centres are
collaborative entities established and led by industry and resourced by highly-qualified researchers
associated with research institutions who are empowered to undertake market focussed strategic
research for the benefit of industry.


Strategic Research Clusters: The SRC programme has been designed to facilitate the clustering of
outstanding researchers to carry out joint research activities in areas of strategic importance to
Ireland in the fields of ICT and BIO, while also giving the time and resources to attract and cultivate
strong industry partnerships that can inform and enhance their research programmes. The
programme was launched in the second half of 2006 by SFI with the review/assessment process,
17
which involved the submission of Expressions of Interest, Pre-proposals and Full proposals, ongoing
through to the end of 2006 and in the first half of 2007. Final funding decisions are expected to be
made before the end of 2007.

Centres for Science, Engineering and Technology (CSETs): SFI'S CSET Programme is the
largest commitment to research within SFI. CSET grants are worth up to €25m over five years, and
may be renewed for an additional term of up to five years subject to performance and maintaining
relevance and research excellence. The objective is to fund centres that can exploit opportunities for
discovery and innovation, link academic and industry researchers in promising ways, generate
products of value in the marketplace, and contribute to the public’s interest in science and
technology. The 2006 CSET Call for Proposals was also launched in the second half of 2006. The
review/assessment process (postal, strategic, and site review) is underway with final funding decisions
expected to be made before the end of 2007.

A new National Support Network for FP7 has been established to assist potential researchers and
research teams, both public and private, to optimise their participation in FP7. A target of €400
million has been agreed in the SSTI for Irish participation in FP7. This target is under review.
3.1.3
Update on other Policy Developments
Digital Hub Development Agency (DHDA)
The Digital Hub Development Agency (DHDA) is briefed with developing a vibrant and world class digital
industry cluster, as well as regenerating an historic community area in the heart of Dublin by operating a
number of significant community and educational initiatives as part of its role in the Digital Hub district. The
Hub has been successful to date in growing the cluster to over 80 companies now employing close to 600
employees involved in a range of activities including games software development, mobile technology,
animation and TV production.
National Digital Research Centre (NDRC)
The National Digital Research Centre will be a significant international centre spanning creativity, design and
technology to realize the commercial potential of research in these areas. With access to world-class facilities
for research and education, and supported by a secure funding base, the National Digital Research Centre aims
to become a world-leading centre for translational research, translating research ideas from concept to
commercial potential. Based in the Digital Hub, Ireland’s digital enterprise quarter, the NDRC will be a
significant international centre spanning creativity, design and technology to realize the real commercial
potential of research in these areas
Marine Institute1 is committed to increasing and improving investment in Marine R&D. Since the first
report of the NRP, the Marine Institute has successfully fulfilled its obligations under the National
Development Plan 2000-2006. By December 2006 grant-aid expenditure of €46.417m million was allocated
across three sub-measures to 82 projects. 40% of these projects are complete. Through the recently initiated
Marine R&D programme, 2007-2013 under the National Development Plan, the Marine Institute is supporting
industry R&D. Company Awards are available to individual companies to help them with research activities
that will enhance their competitiveness. Collaborative Awards will support firms working with each other
and/or with a research provider. The call for proposals was launched in July 2007.
3.1.4
Starting up and Scaling up – Access to Finance2
In 2006, Enterprise Ireland supported 76 High Potential Start-up Companies (HPSU’s). Total investment in
these companies was €47.5m of which EI provided €11.7m. As part of its Strategy ‘Transforming Irish Industry
2005-2007’ Enterprise Ireland set out very clear targets to is on track to achieve its strategic target of
1
2
http://www.marine.ie
See also see paragraph 3.3.4 below
18
supporting 210 HPSU’s by end 2007. In 2006, approvals to client companies for R&D, expansions,
management development, training and productivity improvement projects totalled €121.4 million.
Under the new Seed and Venture Capital Fund Scheme EI committed c. €98 million, covering 14 funds,
towards venture capital for SMEs in Ireland, leveraging in the region of €400 million in additional funding.
Enterprise Ireland engaged independent consultants to undertake a study examining how the seed and venture
capital market in Ireland could be further developed and Enterprise Ireland’s role in this regard. Following the
completion of the report and in the context of its findings, the Minister for Enterprise, Trade and Employment
announced a new round of Venture Capital Funding, for the period 2007 – 2013, totalling €175 million, which
will leverage an estimated €1bn for investment in start-up, early stage and development stage businesses.
Enterprise Ireland board has approved nine venture capital funds under this scheme. The AIB Seed Capital fund
was launched in July 2007 under the scheme and seven more are expected to be launched in the coming
months.
Enterprise Ireland approved support of over €7 million for 14 new community enterprise centres (CECs) and
10 expansions of existing centres. In recent years we have supported 168 CEC projects with a total
investment in excess of €40 million, making a significant impact in regional economies. In addition, the Minister
for Enterprise, Trade and Employment announced a new €21m scheme in April 2007. The CEC Scheme is a
community led initiative in the form of a partnership between the local community and the State whereby the
local community provides business space in a centre and Enterprise Ireland fund up to 50% of the costs of the
centre. The remainder of the funding is actively raised by the community itself from local sources. The current
scheme will run over three years (2007-2009) with three calls for proposals over this period.
3.1.5
Extension of Business Expansion Scheme (BES) and Seed Capital Scheme (SCS)
State-aid approval has recently been received from the European Commission for the extension and
amendment of the Business Expansion Scheme (BES) and the Seed Capital Scheme (SCS). The BES and the
SCS play an important role in helping bridge the financial gap for businesses in the pre and early start up phases
of new enterprises. The approval received did impose some limitations on the changes proposed.
Notwithstanding these limitations the recommendations of the Small Business Forum on this issue have now
been largely implemented. The importance of these schemes is reflected in the Government’s continued
commitment to them in the agreed Programme for Government.
The extension of the two schemes in the December 2006 budget for a further seven years provides for an
increase in the amount of money that firms can raise through the scheme to €2 million, up from the previous
limit of €1 million. The higher limit is subject to a maximum of €1.5 million being raised in any one 12-month
period.
3.1.6 Public Procurement and innovation
The introduction of the National Public Procurement Policy Framework by the National Public Procurement
Policy Unit (NPPPU) in the Department of Finance in 2005 has sought to encourage a move from a focus on
compliance only with procurement rules to seeing public procurement as a strategic function within the
organisation. A fundamental practical requirement of this Framework is that all non-commercial central and
local authorities develop a Corporate Procurement Plan. These individual plans are underpinned by an analysis
of procurement expenditure and supplier analysis and require individual contracting authorities to set targets
and measures for improving the procurement process in their organisations including achieving whole of
government policies such as social, environmental or greater use of innovation in their public procurement
activities.
The NPPPU has also been seeking to support change in the public sector procurement process and practices
through capacity building and training and education initiatives. To date a number of government departments,
agencies and local authorities have completed or are in the process of completing and implementing corporate
procurement plans. There is growing recognition in the public sector of the added value that can be achieved
by making changes in the way public procurement is carried out by contracting authorities. There have been
some changes in the structure of purchasing in some public bodies with the appointment of procurement
managers and dedicated personnel dealing with procurement and purchasing. The development and
widespread use of the e-tenders system has helped provide greater access to public sector opportunities.
19
There have also been practical procurement initiatives. For example, arrangements have been set up at central
level for the acquisition of IT products (laptops and personal computers) by individual public bodies which have
allowed some SME’s to get involved in national contracts for such goods. These arrangements also
demonstrate the broad value for money benefits of aggregating demand.
In May 2007 the Department of Finance published the consultation paper “Improving SME Access to Public
Procurement” the main focus of which is to examine accessibility to public procurement opportunities by
SMEs. However the document does point to the possibility of stimulating innovation in the context of
promoting whole of government objectives. In this context the recently published EU Commission Guide on
dealing with innovative solutions in public procurement3 is timely and will inform the consultation process.
These new Guidelines are aimed at helping procurers in the Member States to take full advantage of the
possibilities offered by the public procurement Directives. The guide identifies a number of principles and good
practice examples on how public procurement can promote innovation. The principles described in the guide
are not only suitable for products but more importantly also apply to the procurement of innovative services.
This can be very significant for both the economy and the public sector because of the importance of services
to economic growth and the enormous range of services provided by and through the Public Sector.
There are also opportunities for innovation in the context of the National Development Plan 2007-2013.
Although it focuses strongly on Value for Money in public procurement, there is scope for innovative
procurement under the Plan, including through Public Private Partnerships (PPP’s) or through design and build
mechanisms in tendering and construction contracts.
3.1.7
Intellectual Property
In 2004, the Irish Council of Science, technology and Innovation launched the first National Code of
Practice for Managing Intellectual Property from Publicly Funded Research, providing certainty,
confidence and consistency to all stakeholders in publicly funded research. Strengthening Ireland’s
commercialisation framework in this manner helps secure Ireland’s reputation as an attractive location for RDI
and its exploitation. In 2005, a complementary code for collaborative research was published. The National
Code of practice for managing and Commercialising Intellectual property from Public-Private
Collaborative Research provides a framework and practical guideline for joint research by enterprises and
higher education. Technology Transfer Offices playing a vital role in managing IP in Higher Education
Institutions. In addition, organisations such as Science Foundation Ireland advise that collaborators agree a
statement on intellectual property prior to undergoing joint projects, while Enterprise Ireland’s Intellectual
Property Fund for Higher Education and its Intellectual Property Assistance Scheme offers both
advice and financial support.
3.1.8
Networks and incubators
From the perspective of regional development and innovative start-up activity, Enterprise Ireland (EI)
recognises the importance of providing adequate infrastructure space throughout the country. Incubators for
example, provide an essential complement to public investment in scientific research and help drive the
commercialisation of research into long-term business opportunities.
As of the end of 2006, EI has invested over €46 million in business incubation activity. This covers 25
incubation centres, 16 of which are based in Institutes of Technology in all regions, three in universities and six
bio-incubation facilities on university campuses.
Institutes of Technology are important to balanced regional development. Enterprise Ireland supports the
establishment of Centres of Excellence in applied research and assists the institutes of technology to compete
successfully for national and international research funding. In 2006, EI’s Applied Research Enhancement (ARE)
programme was introduced on a national, non-competitive basis. ARE provides opportunities for the institutes
to develop research capability in areas of strategic importance to the individual colleges and which are of
3
SEC (2007) 280, see : http://www.proinno-europe.eu/doc/procurement_manuscript.pdf
20
relevance to industry in the particular region. To the end of 2006, EI has funded eight centres with an
investment of €10 million.
Networks
With knowledge now the primary economic resource, companies, especially SMEs, increasingly find that it is
necessary to look externally for all the skills and expertise required for competitive success. Collaboration is
critical for competitive companies. The Enterprise Strategy Group Report, ‘Ahead of the Curve’ concluded
that, ‘in the future, business networks will increasingly facilitate knowledge transfer, disseminate market
knowledge [and] foster innovation…”
By coming together to identify and address enterprise needs, interests and requirements Industry-led
networks can potentially deliver additional benefits over and above what individual companies can achieve on
their own. The Enterprise Ireland Industry-Led Networks Pilot, launched in 2006, with funding for numerous
network-related activities, is designed to support Industry-led networks, or groups of companies undertaking
time limited collaborative projects with such benefits to regional development, women in enterprise, rural
development or other national economic objectives.
InterTrade Ireland, the cross-border Trade and Business Development body, helps coordinate and develop
All-Ireland Business Networks. This helps to reverse traditionally disjointed economic connections
between jurisdictions and especially in the border areas. Through creating and fostering networks of people
and businesses in key sectors, ITI helps them to develop business opportunities. The Agency helps individual
businesses to access knowledge and share information so they can build alliances and become more profitable
and competitive. Certain enterprise sectors will play an intrinsic part in future enterprise growth and ITI is
active in establishing networks in these areas. Already robust networks have been set up in the
health/biotechnology, food, software and polymer and plastics sectors.
3.2
Knowledge Society and eGovernment Policy
Guideline 9: Facilitate the spread and effective use of ICT and build a fully inclusive information
society
The Knowledge Society Action Plan being prepared will be published later in 2007. This will build upon the
advances made and the outcomes achieved by the two previous National Action Plans while recognising the
ubiquity of technology, the need to use technology as a tool in the drive towards Knowledge Economy
activities and the need to provide for greater inclusiveness. It will be in line with the EU i2010 Initiative, ‘A
European Information Society for Growth and Employment’, and will provide for the continued exploitation of ICTs
by all; including government, businesses, public sector and the community and voluntary sector. It will include
specific actions on awareness of, access to, and application and greater exploitation of ICTs with a view to
stimulating and encouraging greater engagement with and participation in the Knowledge Society.
3.2.1
Futures Ireland Project
The Learning Society Foresight Project, now called the Futures Ireland project, being pursued by the National
Economic and Social Development Office (NESDO), commenced in April 2007. The project will examine
governance, decision-making processes and public policy with the aim of enhancing Ireland's capacity to
anticipate and prepare for a future in a learning society that may be profoundly different from the present. A
National Advisory Panel (NAP) has been formed to support the work of the project and an international
consultant and a national consultant have been appointed to work with the NESDO project team. The Futures
Ireland project is due for completion in June 2008.
3.2.2 E-Inclusion
On connectivity, the percentage of households with home computers in April 2006 increased to over 828,000
(up to 56.6% from 55% in 2005) 683,000 (46.7%) of households with computers are connected to the Internet.
Of this total, 292,000 households had a broadband connection to the Internet.
21
Following the success of the 2006 initiative to support the participation of late adopters in an inclusive
Information Society a further allocation of up to €3m is being provided in 2007 under the Access, Skills and
Content (ASC) Initiative. This funding will benefit projects, being organised and disseminated at local level by
the voluntary and community sector, primarily targeted at older people and people with disabilities. Part of
the fund will be used for research. In 2006 € 1.45m was allocated to support a total of 75 projects. These
projects increased awareness and relevance of ICTs through the availability of relevant content and promoted
ICT skills development. It is expected that before the end of 2007 more than 80 additional initiatives will have
been assisted in this way.
3.2.3 ICT in Schools
The provision of broadband connectivity to all primary and post-primary schools in the country is nearing
completion, under the Schools Broadband Access Programme, which is supported by the telecommunications
industry. A Strategy Group has been established to advise on the development of a new ICT Strategy for
Schools to 2013, under the NDP. The aim of the new strategy is to develop an e-Learning culture in schools
that will ensure that ICT usage is embedded in teaching and learning across the curriculum.
Broadband
The roll-out of broadband connectivity to all recognised primary and post-primary schools is being undertaken
in partnership with industry, in the context of the joint Government /IBEC - TIF (Telecommunications and
Internet Federation) three year Agreement to fund local connectivity at school level. The overall costs of the
Schools Broadband Access Programme, including the initial set-up and ongoing costs over the three years are
in the region of €30m. To date, the vast majority of schools (97%) have had their broadband connectivity
successfully installed.
New Strategy for ICT in Schools Programme
The National Development Plan contains a provision of €252m for ICT in Schools, the essential purpose of
which is to advance the embedding of an e-Learning culture in teaching and learning in schools. A Strategy
Group has been appointed to advise on the prioritisation of measures, with the intention of publishing a new
ICT strategy covering the period of the National Development Plan. As part of the development of this new
strategy, it will be necessary to consider and address a wide range of issues including teacher education,
teacher professional development, curriculum developments, the maintenance of the national broadband
network for schools, the upgrading and renewal of hardware and the provision of software and digital content
for learning. The planned investment will also address maintenance and support requirements.
Other Developments
At post-primary level, the new Technology syllabus and the revised Design and Communication Graphics
syllabus at Leaving Certificate level, which involve the use of Computer Aided Design, will be introduced with
effect from September 2007.
3.2.4
E-Business Strategy
A detailed progress report on the implementation of the National eBusiness Strategy was published in April
20064. The report outlined progress against the thirteen recommendations identified in the National
eBusiness Strategy, and highlighted areas for continued focus and effort going forward. At that time, nine of
the 13 recommendations were addressed comprehensively.
The recommendations and progress achieved to date cover the following areas:






Legal and regulatory framework
Development Agency supports
ICT Management and User Skills
Information channels for SMEs
E-Procurement
Benchmarking and Statistics
In addition to the progress already achieved, the following areas are being progressed in 2007.
4
http://www.entemp.ie/enterprise/support/ebusinessstrategy.htm
22
Enterprise Ireland’s eBusiness Unit continues to promote the use of ICT among client companies through the
eBusiness Management Initiative. The programme supports projects across all sectors that improve
productivity or increase international sales. This included 66 clients attending a workshop on using the internet
to compete in international markets in 2006. This workshop is being run again in October 2007 and over 100
client companies are expected to attend.
In April 2007 the Minister for Enterprise, Trade & Employment, Mr Micheál Martin, TD, unveiled details of
“Tech-Check”, a new programme to be delivered by the County and City Enterprise Boards. The
programme will offer a highly subsidised technology check-up to small business and help them to identify ways
to boost their productivity and profitability through the better use of technology.
Work on the remaining recommendations is continuing throughout 2007.
3.2.5 High Speed Connectivity
The enhancement of broadband services in the telecommunications market is a Government priority. There
was growth of almost 247,000 broadband subscribers, or 105%, during 2006. This strong growth is based in
both the SME and residential markets. A target of 400,000 subscribers by end-2006 had been set, and this was
surpassed, with the final actual figure being 517,000 subscribers. The latest available figures show that there
were more than 602,000 broadband subscribers in Ireland at end of quarter one of 2007 (Official figures from
ComReg). This corresponds to an increase of over 84,000 subscribers since the previous quarter, and
represents the highest number of new subscribers added in any single period since the launch of broadband
services in Ireland. Based on these figures, Ireland is on course to pass the EU-25 average by the end of 2007.
The policy focus is on increasing competition on the supply-side of the broadband market for the benefit of
the consumer including promoting increased choice of supplier and product for consumers, removing barriers
to market entry, and addressing market failure in infrastructure provision through various regulatory and
investment interventions.
3.2.6
Broadband Action Plan and National Broadband Scheme
The Department of Communications, Energy and Natural Resources (DCENR) regional broadband
programme is addressing the infrastructure deficit by building high-speed open access broadband networks, in
association with the local and regional authorities. Twenty-seven Metropolitan Area Networks have been
completed under Phase One of the MANs Programme. The completed networks are being managed
independently for the State, by e-net, the Management Services Entity, and offer wholesale open access to all
service providers. Work is continuing on Phase II of the MANs Programme, which will deploy fibre networks
to a further 90 towns, and will be completed by the end of 2008.
However, there are areas of the country where the private sector is unable to justify the commercial provision
of broadband connectivity, accounting for approx 10% of the population. D/CENR will address this gap in
broadband coverage through the National Broadband Scheme (NBS), which aims to provide a broadband
service to areas that are not currently served, and will ensure that all reasonable requests for broadband from
houses and premises in un-served areas are met. The tendering process for the NBS commenced on 2 May
2007 and a winning Service Provider (or consortium of Service Providers) is expected to be appointed before
the end of 2007. The process was formulated after consultation with DG Competition, and studying of the
models in operation in Greece, England, Wales, Scotland and Northern Ireland. The estimated timescale for
the award of the NBS contract is December 2007, with rollout of the services due to begin as soon as possible
thereafter, subject to agreement with the chosen Service Provider.
A Group Broadband Scheme offered smaller towns and rural communities the chance to obtain broadband
connectivity for their areas, with funding assistance from the Government. The scheme was co-funded under
the NDP 2000-2006 by the E-Commerce and Communications measure of the BMW and S&E Regional
Operational Programmes There were two calls for proposals under the Group Broadband Scheme (GBS).
Between both calls a total of 162 projects were approved. However, some projects did not proceed for
commercial and operational reasons. A total of 127 projects have been implemented.
23
3.2.7
Next Generation Networks
The Department of Communications, Energy and Natural Resources is currently preparing a draft policy paper
on Next Generation Networks/Broadband. The draft policy paper will be considered by the proposed
National Advisory Forum on Telecommunications (NAFT) which is expected to be established in Autumn
2007. The NAFT will propose various policy options and recommendations to the Minister with a view to
facilitating the timely roll out of Next Generation Networks/Broadband in Ireland.
24
3.3
Business and Industry
Guideline 10: Strengthen the competitive advantages of its industrial base
Guideline 15: Promote a more entrepreneurial culture and create a supportive environment for SMEs
3.3.1
Enterprise Advisory Group
The structure of the Irish economy is quickly evolving from one where investment led production has tended
to dominate the enterprise environment (often driven with the benefit of foreign direct investment) to one
where services, innovation and adaptability to global markets are increasingly the driving force of economic
and employment growth. This requires a different strategy orientation to better align enterprise policy
development, programme initiatives and competitiveness. It also means that Government and its institutions
have to build into policymaking an element of adaptability and flexibility almost approaching that required by
business itself in reacting to market change.
The Enterprise Advisory Group5 comprising senior and globally experienced enterprise executives, was
mandated to track implementation of 47 recommendations to strengthen our enterprise base and improve
the framework conditions for business.
Some examples of recent progress in moving forward this agenda include:





3.3.2
Greater cohesion and a rationalisation of strategic operational functions in the indigenous enterprise
agencies from 1 January 2007 by the transfer of certain Shannon Development functions to Enterprise
Ireland and the establishment of a central co-ordination unit for County Enterprise Boards in
Enterprise Ireland. This will enable better delivery of services and supports to indigenous enterprises.
Designing a new programme to seed the formation of business networks that will include involvement
of enterprise interests from Northern Ireland;
Development of new training courses for sales and marketing employees;
Strengthening third level Technology Transfer Offices;
Increasing and developing the Workplace Education Fund to progress the “One Step Up” agenda
among those with the lowest skills.
National Competitiveness Council (NCC)
The NCC continues to play a very important role in providing policy advice on national competitiveness. The
Council’s regular analysis and policy suggestions form the basis for rolling surveillance by Government of
competitiveness enhancing activity being undertaken across the administration. The NCC is supported by
Forfás, the national advisory board for enterprise, trade, science, technology and innovation. This provides the
NCC with access to significant research resources and the capability to provide in depth examination of key
competitiveness drivers such as productivity, innovation and investment priorities.
3.3.3
Sectoral Approach for Exporting Companies
Enterprise Ireland is now in the third year of its three year strategic plan to exploit market opportunities for
exporting companies. In this context it set a target of €3 billion in new export sales over the period 2005 to
2007. In 2006, new international sales were €1.6 million. The remit of Enterprise Ireland international staff
continues to include assistance to companies in accessing venture capital and technology transfer opportunities
in global companies. In 2006, 26 international mentors were assigned to work with clients in overseas markets.
These highly experienced business executives, with specific technical and market knowledge, work with client
5
http://www.entemp.ie/press/2005/20051009.htm
25
companies to advise them on strategies and to introduce them to key contacts offering sales and funding
opportunities.
3.3.4 The growing importance of Clusters – a high technology example
Ireland’s medical device sector has been growing rapidly over the decade and has become a key technology
and growth area for the economy. It’s accelerated expansion demonstrates Ireland’s reputation as an
important EU centre of high technology products and services. About 150 companies are involved, employing
over 24,000 and exporting over €6 billion a year. Eight of the world’s top ten companies have chosen Ireland
as a base for their operations. A significant cluster of firms in the sector are located in the West of Ireland. In
just three counties (Galway, Roscommon and Mayo) medical device companies employ 10,000 people. Here
the sector is supported by strong educational infrastructure with third level institutions providing the critical
research and learning environment that channels skills and innovative capacity to serve the development needs
of the sector.
In 2004 members of the sector and key participants in its industry structure (such as clinicians and
researchers) came together to encourage deeper collaboration within the sector and identify a vision of how
the sector could develop to better position it competitively against its global market challengers. Within a year
the importance of this industry led initiative brought about much closer involvement with national and regional
authorities.
This industry/public sector co-operation brought about the Medical Technologies Sector Platform that was
launched in October 2005. The Platform’s work was a potent force in adopting a cluster/network approach to
strengthening the sector that involved increased numbers of indigenous medical technology companies
committed to exploiting product innovation based on technology convergence, interdisciplinary alliances and
emerging technologies.
As a consequence of this work the Medical Technologies Council was formed at the end of 2006 with the
continuing involvement and support of public agencies. On behalf of the sector the Council sees an integrated
Irish medical technologies sector that is recognised as a world-class centre of medical education and research;
a medical technologies sector possessing world-leading interdisciplinary medical education and research
networks; and on-going generation of commercially viable innovations in convergent medical technologies.
The Council has substantially and progressively moved forward the strategic agenda for the sector by, for
example, sponsoring mentor, marketing and R&D activity, setting up a cross sector clinical trials taskforce,
involving the Galway based centre for Innovation and Structural Change in regional network action and
facilitating and promoting the setting up of industry led technology research networks. Their work will be
aligned with the new competence centres that are mentioned elsewhere in this Report 6.
3.3.5 Small and Medium Enterprises
The Report of the Small Business Forum called for the establishment of a national Entrepreneurship Policy that
would include stimulating latent entrepreneurial potential (particularly amongst women and immigrants),
reinforcing entrepreneurial thinking in the educational system; and enhancing the culture of entrepreneurship.
Since the Report was published considerable progress has been made in respect of the implementation of the
Report. The Implementation Group tasked with the implementation of the Report met with the Minister for
Enterprise, Trade and Employment on two occasions during 2006/2007 to discuss progress. The second
Progress Report on the Implementation of the recommendations of the Small Business Forum was published in
March 20077.
3.3.6 Learning for Business Managers
In May 2007, the Minister for Enterprise, Trade & Employment established the Management Development
Council, following on from a recommendation of the Small Business Forum. The Council will benchmark
6
7
See also reference to Digital Hub Cluster in paragraph 3.1.3 above.
http://www.entemp.ie/publications/enterprise/2007/sbfprogressreport2.pdf
26
Ireland’s current management development provision, determining whether or not this meets the
requirements of SMEs, identifying any gaps and developing action plans to address these gaps. It is also charged
with developing a coordinated approach to building appreciation in the SME sector for the value and need of
leadership and management skills. Innovative firms require innovative leaders.
3.3.7 Fiscal Measures to Assist SME’s in Ireland
In addition to the fiscal measures outlined in the previous Progress Report the following additional measures
have been introduced:

The Audit Exemption threshold above which businesses are required to be audited was raised
under Section 9 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006 which
came into effect from 24 December, 2006. The new audit exemption thresholds are turnover of
€7.3m and balance sheet of €3.65m

VAT cash accounting threshold for small firms from €635,000 per annum to €1 million with effect
from 1 March 2007.
3.3.8 One-stop-shops
In Ireland, ICT plays a significant role in facilitating coordination and greater integration between agencies and
in making it easier for business to be set up and to comply with associated compliance procedures. These
arrangements between agencies involved, notably the Revenue Commissioners and the Companies
Registration Office, ensure that, in most cases, a company may be established within a week.
3.3.9 National Entrepreneurship Policy – Role of County and City Enterprise Boards (CEBs)
One of the strands of enterprise policy in Ireland is the on-going effort to develop local indigenous enterprise
potential in the micro-business sector through the stimulation of economic and entrepreneurial activity at city
and county levels. The CEBs seek to harness a collective effort across a broad spectrum of the local
community in order to generate local economies of real strength and durability. CEBs operate a range of
support instruments to assist the establishment and on-going development of viable business proposals coming
forward from within their individual and local areas of operation. These supports include:
 a locally accessible informal 'first-stop shop' for people starting or planning to start their own
businesses;
 financial supports including the provision of feasibility, employment and capital grants to eligible
projects;
 a range of "soft" supports for businesses such as business information/advice, management training
and skills development programmes, mentoring services, etc.
3.3.10 Enhancing an entrepreneurial culture - Management and Capability Development
Supports
To assist small business in meeting administrative, legal and training challenges the CEBs provide a wide range
of supports including training programmes, work-shops, seminars and mentoring services. All training
programmes are business specific in content and cover areas such as:
 start-your-own-business-programmes
 management development courses
 sales/marketing courses
 financial management training
 e-commerce
 IT skills training.
3.3.11 Reinforcing entrepreneurial thinking in the education system
The County Enterprise Boards are strongly committed to promoting enterprise in second level schools
through their involvement in programmes including the Student Enterprise Awards Scheme. The competition
is a countrywide event and 1 in every 6 second-level student participates.
27
The CEBs also promote successful female entrepreneurs as role models and the use of mentoring and
networking opportunities through Programmes such as the Women-in-Business initiative. The CEBs have also
been very successful at attracting the active participation of women in their range of training programmes such
as Start your Own Business courses and Management Development Programmes. Women make up nearly
60% of participants on these programmes.
In January 2007, the Global Entrepreneurship Monitor measured an early stage entrepreneurship rate of 7.4%
in Ireland, ranking Ireland 2nd in the EU and 7th among OECD countries for entrepreneurial activity. This
suggests that the climate for entrepreneurship is positive and may be assisted by our benign business
framework condition such as relatively low taxation and low regulatory burden and relatively easy access to
finance. The Government also promotes entrepreneurship in the Irish education system, with over 40,000
second-level students engaged in various forms of work experience each year, Enterprise Education as part of
the Leaving Certificate Vocational Programme and the Student Enterprise Awards with 10,000 students a year
developing their entrepreneurial skills.
3.3.12 Intellectual Property Information and Support
Enterprise Ireland operates an Intellectual Property Assistance Scheme. The Scheme provides advice and
information on the protection, technical development and commercialisation of inventions. In certain
circumstances, Enterprise Ireland can provide financial assistance towards funding a patent programme for the
invention covering Ireland and appropriate foreign countries. Finance or technical development and other
aspects of bringing a product to market is covered by other Enterprise Ireland Schemes. Enterprise Ireland
also operates a Higher Education Sector Patent Fund which provides funding to protect research results
obtained by third level colleges.
In addition, the Patents Office continues to disseminate a Good Practice Guide and CD ROM which contain
case studies and 10 pragmatic recommendations for companies especially SMEs aimed at highlighting the
importance of IP to companies’ business strategy. The CD ROM also contains an interactive audit tool which
is designed to assist business and SMEs in recognising and managing their IP assets as well as deciding on the
need for IP protection.
3.3.13 Tourism Policy
In its 2003 Report, New Horizons for Irish Tourism: An Agenda for Action, the Tourism Policy Review Group
set out a comprehensive tourism development strategy covering a 10 year period to 2012 and a detailed plan
of specific actions over an initial two-year period. The Tourism Action Plan Implementation Group was set up
to give an impetus to the delivery of the strategy and action plan for the initial period. This completed its work
with a final progress report in 2006 and was succeeded by the Tourism Strategy Implementation Group (TSIG)
in May 2006, which has been working with the industry to address a number of key areas where further
progress was identified as necessary to achieve the objectives set out in 2003. These include competitiveness,
internal and external access/transport, tourism product development and innovation, and regional
development. Significant progress has been made on a number of these areas as set out elsewhere in this
Report.
3.3.14 Marine Research Programmes
Under the Industry Research Measure of “Sea Change”, the Marine Institute is improving access to research
funds which aims to strengthen the innovative potential of SME’s. The Marine Research Sub-Programme is one
of eight sub-programmes within the Science, Technology and Innovation (STI) Programme of the National
Development Plan 2007—2013. The long-term objective is to raise the capability of the largely indigenous
marine industry sector SMEs (including micro-enterprises) to engage in research and manage technology in
ways that contribute to improving the marine sector’s competitiveness. In July 2007, the Marine Institute
launched its first call for proposals under the Marine Research Sub-programme 2007-2013. The research
priorities to be addressed through this sub-programme resulted from an extensive national foresight exercise.
Ongoing implementation will be monitored and reviewed by a national steering group and specific thematic
implementation teams. Progress will be measured against pre-defined targets and indicators.
28
The Marine Institute and the Department of Agriculture and Food are also co-funding a new research initiative
to form a research consortium that will focus on marine functional foods and functional food ingredients
research. It aims to establish Ireland as a leader in the $74 billion worldwide market for functional foods.
Evaluation of submissions for the €5.2 million Marine Functional Foods Research Initiative will be completed by
September 2007. This initiative was built upon inter-Departmental collaboration and co-funding and an
integrated response from research institutions on the island of Ireland.
3.4
Business Environment and Better Regulation
Guideline 14: Create a more competitive business environment and encourage private initiative
through better regulation
3.4.1
Better Regulation in Ireland
Significant progress has been made in implementing the commitments contained in the Action Plan
accompanying the White Paper, Regulating Better. The actions highlighted here are intended to improve the
regulatory environment which affects business and other stakeholders.
Officials are now routinely applying Regulatory Impact Analysis (RIA) to regulatory proposals in advance of
their submission to Government. The Better Regulation Unit in the Department of the Taoiseach continues
to provide practical support for officials conducting RIAs, including through a training course, guidelines and
template as well as through the recently established RIA Network which includes a representative from every
Department and Office required to carry out RIAs. Departments and Offices are encouraged to publish RIAs
in line with the commitments on RIA contained in the Social partnership agreement “Towards 2016”. An
independent review of the operation of RIA is expected to commence in Autumn 2007.
The Statute Law Revision Act 2007 repeals 3,225 obsolete statutes enacted before 6 December 1922 and
retains, through a “white list”, 1,364 statutes which are still relevant. This Act builds on the Statute Law
Revision (pre-1922) Act 2005 which removed a further 209 pieces of redundant legislation. In addition, it is
expected that the Land and Conveyancing Law Reform Bill 2006 which will, inter alia, repeal a further 300 acts
will be enacted later this year.
Following a successful pilot, the Government recently agreed to completely replace the current system of
making Statutory Instruments (SIs) with a new electronic system. The new System will, amongst other things,
facilitate the faster and more accurate provision of SIs, in both electronic and printed format to all
stakeholders, including business.
The Law Reform Commission has recently published a comprehensive consultation paper on the issue of
statute law restatement as part of the timely development of an appropriate programme of restatement.
In February 2007, the Government approved the publication of a 'Report on the Number of Bodies in Ireland
with a Regulatory Role'. This Report identified the number and range of bodies with regulatory powers
operating in Ireland and will act as a useful tool in ensuring that the range of regulatory institutions is optimal,
that accountability mechanisms are comprehensive, and that structures are up to date and relevant. The
Report is available at www.betterregulation.ie. Considerable progress has already been made in developing a
searchable, online database of regulatory bodies. The Programme for Government includes a commitment to
a review of the regulatory environment. Preparations for this review are currently being made.
The ESRI (Economic and Social Research Institute) Survey of Business Attitudes to Regulation, commissioned
by the Department of the Taoiseach, was published in March of this year. This comprehensive survey of over
800 companies, including small and medium-sized enterprises, has been widely distributed. Efforts are now
being focused on actioning the findings of the Survey (see below).
3.4.2 Business Regulation Forum
The Business Regulation Forum (BRF) published its report in April 2007. The report recommended a targeted
approach to administrative burdens reduction and to reduce costs to businesses by making regulations more
29
efficient, by reducing duplicative information requests and by eliminating unnecessary obligations altogether.
The Forum recommended that reductions be carried out in five main areas of regulation where both national
and international evidence suggest that the majority of burdens lie. These are taxation, health & safety,
environmental regulation, statistical reporting, and employment and company law. It is estimated that more
than 80% of all administrative burdens on business are to be found in these five areas.
3.4.3 High Level Group on Business Regulation
In response to these recommendations and to the Taoiseach’s commitment made at the Spring European
Council on March 8th-9th of this year, the Minister for Enterprise, Trade and Employment, Micheál Martin TD,
has set up a High Level Group, chaired by the Secretary General of his Department, to progress this agenda.
The Group will act as a ‘clearing house’ for practical ways to reduce administrative burdens on business in
Ireland. The Group consists of business representatives, representatives from Departments and agencies and
the Irish Congress of Trades Unions. The Group will make an initial report to the Minister for Enterprise
Trade and Employment before July 2008. The simplifications that emerge from the Group will contribute to
Ireland’s efforts to achieve targeted reductions in the administrative burden of Irish domestic regulation in
keeping with the agreement reached at the European Council in March and the Group's work will be informed
by, amongst other things, the findings of the ESRI Survey mentioned previously.
More specifically, the Company Law Review Group recently published the General Scheme of a Companies
Consolidation and Reform Bill. This brings together the existing thirteen Companies Acts, dating from 1963
to 2006, into one streamlined, comprehensive Bill. The overall rationale for the Bill is to improve Ireland’s
competitive position as a location for business investment. The consolidation, modernisation and reform of the
law seeks to ensure a balance between:



simplifying the day-to-day running of a business;
the compliance duties of company officers and auditors aimed at protecting creditors and investors;
and
the corporate enforcement regime to enforce compliance.
The architecture of the General Scheme is inspired by the reality that 90% of companies registered are private
companies limited by shares and this introduces a greater clarity and simplicity into the layout of the
Companies code.
30
3.5
Sustainability
Guideline 11: Encourage the sustainable use of resources and strengthen the synergies between
environmental protection and growth.
3.5.1
White Paper on Energy Policy
The White Paper on Energy Policy, “Delivering A Sustainable Energy Future For Ireland,” published in March 2007,
sets out a strategic framework of actions for Energy Policy to 2020. The framework encompasses three key
areas of energy policy aimed at ensuring Security of Supply, Sustainability of Energy Supply, and Economic
Competitiveness. There are also strong linkages and synergies between the White Paper and the National
Climate Change Strategy, also published in March 2007.
3.5.2
Renewable Energy
Ireland has set targets to increase the contribution from all renewable energy sources of electricity production
to 15% of gross electricity production by 2010 rising to 33% by 2020. In order to achieve these targets Ireland
has put in place an advanced feed in tariff mechanism known as REFIT. This support mechanism is sufficiently
flexible to cater to those renewable technologies currently in production and to encourage new technologies
to become more commercially viable.
The Government is committed to the development and deployment of bio-energy generally in Ireland.
The Biofuels Mineral Oil Tax Relief Scheme II was introduced in 2006, valued at over €200m. Under this
scheme sixteen projects have been awarded excise relief to the period 2010. The scheme will enable us to
reach an initial target of over 2% market penetration of biofuels by 2008. As a result of this scheme, biofuels
are already being mainstreamed in blends of up to 5% at a number of existing petrol and diesel pumps, and
higher blends are being sold to identified vehicle fleets. The Government has also introduced a 50% VRT relief
on Flexible Fuel Vehicles, which are capable of running on blends of up to 85% ethanol in petrol. These
vehicles are now available in Ireland from a number of car manufacturers. The National Climate Change
Strategy also commits to a realignment of VRT and Motor Tax to favour more energy efficient cars.
In February 2007 the Government announced the introduction of a biofuels obligation which will ensure that
biofuels represent 5.75% of Ireland’s transport fuel market by 2009 and 10% by 2020. The biofuels obligation
will allow Ireland to achieve emissions reductions of up to 770,000 tonnes of CO2 per year by 2009. This will
have the effect of removing the equivalent of 200,000 cars off the road annually. This is more than the number
of new cars registered in 2006, which is a significant achievement. Critically it provides long term market
certainty that will allow market players in Ireland to develop economically viable scale into their projects. This
in turn will assist industry and the farming sector in developing appropriate financing, planting, refining, storage,
distribution and supply chain logistics.
Under the Programme for Government we will introduce a minimum requirement for the use of Biofuels in
State-owned and public transport vehicles. We will introduce biofuels in blends of up to 5% in existing Local
Authority and CIE fleets and will achieve 30% in new vehicle purchases by CIE.
Other initiatives, in the form of grant aid, for the promotion of renewable energy in the residential and
commercial sectors which were implemented in 2006 have proven very successful. The Greener Homes
Scheme which is providing grant aid over a five-year period to the domestic sector for the installation of
renewable heat technologies including solar, biomass and heat pumps has received over 17,000 applications
since it was launched. In Budget 2007 the funding for the programme was increased from €27m to €47m.
With regard to the five-year grant aid Bioheat scheme which was launched in June 2006, a sum of €22m was
originally made available for this scheme to 2010 and in Budget 2007 a further €4m was added to the
programme, which was expanded in March 2007 to include solar and other renewable technologies, and to
allow community and voluntary groups to avail of the grants. Investment, applications and commitments to
date are as follows:
31





€1.5million committed, average project grant €28,000
125 received applications: 100 for Capital Investment 25 for Feasibility Study
63 approved applications: 48 for Capital Investment 15 for Feasibility Study (this includes the
incomplete and complete approved projects)
Of the approved applications 11 complete: 5 for capital investment 6 for Feasibility Studies
Applicants are from a range of sectors including hotels, agricultural companies, manufacturing, the
leisure sector and health service.
The €11m grants programme for CHP which was launched in August 2006 is providing grants for gas fired
CHP, subject to a maximum of 1MW. Most CHP applications in Ireland use gas to generate the electricity.
CHP from wood or biomass fuels is also possible, and as part of the programme grants will be provided for
biomass-fired CHP later in 2007. There will be no limit on the size biomass CHP plants and this part of the
scheme will be launched as a competitive call for proposals.
Investment, applications and commitments to date are as follows:



€850,000 committed, €50,000 average grant
29 applications have been received: 22 for Capital Investment and 7 for Feasibility Studies
17 approved applications:14 for Capital Investment and 3 for Feasibility Study
The publication of the National Bioenergy Action Plan in February 2007 is an important milestone in the
Government’s ambitious and comprehensive energy policy. The report draws on the collective and
collaborative efforts of seven Government Departments and Ministers. The involvement and commitment of
so many Government Ministers, in the work of the Task Force, demonstrates a holistic approach to the
development of our biomass resources, and one which seeks to ensure that there are benefits across a very
broad spectrum of interests. The Plan represents a very significant input to our climate change objectives and
assists in our wider environmental objectives, by providing a valuable new outlet for traditional waste streams.
The Plan supports the Government’s rural development objectives by providing supports and incentives for
farmers and foresters to diversify into the growing and harvesting of energy crops and products. This is
particularly relevant in the context of CAP reform.
It allows businesses, voluntary and community groups and individual householders to access cheaper cleaner
energy and empowers the entire community to play a role in the development of a more sustainable energy
economy in Ireland. It lessens Ireland’s dependency on imported fossil fuel by creating the framework in which
an indigenous energy sector can flourish. It creates new opportunities, not alone for biomass producers, but
for technology providers and installers, across the entire country. The Action Plan aims to achieve these wide
ranging objectives in an integrated and collaborative manner and the benefits will be wide ranging.
3.5.3 Sustainable Transport
The Government is committed to preparing a Sustainable Travel and Transport Action Plan (STTAP) by 2008,
which will propose policies and measures in order to reverse unsustainable trends in the transport sector in
Ireland and help the transport system evolve along a more efficient pathway. The need for an Action Plan on
transport emerged during the preparation of the Energy White Paper “Delivering a Sustainable Energy Future for
Ireland” and the revised “National Climate Change Strategy (NCCS) 2007-2012,” when it was recognized that
adverse trends in the transport sector in Ireland had created a series of economic, social and environmental
issues for policy-makers.
These result from policies in a range of areas, particularly in spatial planning, which have led to
overdependence on private transport, longer commuting times, and increasing passenger-kilometres. This
cannot continue without diminishing quality of life and social cohesion, irreparably and irreversibly impairing
the national environment, and harming economic competitiveness due to congestion and opportunity cost of
travel time. It is, therefore, imperative to develop policies, that will lead to a transformation in thinking and,
which will deliver alternative transport modes to the private car and sustainable communities.
32
In the Energy White Paper a commitment was made to undertake “a fundamental review of all existing and
potential policy interventions… with the overall aim of achieving a sustainable transport system by 2020”. The revised
NCCS noted that the Action Plan would “propose an optimal policy mix, which will ensure the delivery of a
sustainable transport system…and aimed to reduce both greenhouse gas emissions and energy consumption from the
transport sector over the period to 2020”.
The proposed Action Plan will build upon and complement the Transport 21 capital investment programme,
which will “inter alia cut travelling times, improve safety, deliver real commuting choice, reduce congestion, and protect
the environment”.
Targets to be set by 2020 include:







There will be a considerable shift to public transport and other sustainable forms of travel,
The present levels of traffic congestion and travel times will be significantly reduced,
The growth in greenhouse gas emissions from the transport sector will be reduced,
The transport system will enhance Ireland’s economic competitiveness,
Transport will be positioned to anticipate peak oil supply and constraints on fossil fuels,
Ease of access to public transport will be improved for all citizens, particularly in urban
areas
and for people with reduced mobility and those in peripheral areas, and
Individual awareness will be heightened to understand and accept the changes of behaviour
necessary and level of personal responsibility required to achieve the vision.
It will reinforce the need for capital investment to address critical infrastructural deficits, including setting out
the need for additional investment in cycle and walking networks and set out policies and measures to
influence travel behaviour and incentivise a modal shift from private car transport to public transport, walking
and cycling and from road to rail freight.
These will include:




Demand side management measures, including fiscal instruments, mobility management measures,
and awareness initiatives,
Regulatory policies, including land use and spatial planning, transport operator regulation,
emissions trading, and speed limits,
Technology and innovation, including alternative fuels and technologies, vehicle efficiency and fuel
economy, intelligent transport systems, and integrated ticketing, and
Institutional issues such as local and national governance issues.
The expected timeline is that the Plan will be published in Spring 2008 following public consultation.
3.5.4 Sustainable Development at enterprise level
There is a growing recognition of the positive contribution which eco-efficiency and eco-innovation can make
to the competitiveness of Irish enterprise and the achievement of the Lisbon goals. The Enterprise Ireland
Environment Unit provides a range of services to assist client companies to improve their environmental
performance. The Environmental Management Scheme provides financial assistance to companies to support
and train management in the installation and running of an Environmental Management System. Enterprise
Ireland also runs the Environmentally Superior Products Programme which is designed to support
manufacturing companies to reduce the environmental impact of their products. In addition, Enterprise Ireland
has an Environment Markets Department which provides business development and international networking
for the Irish environmental manufacturing sector.
3.5.5 Environmental Technologies
It is now acknowledged that the environmental technologies sector is one of the fastest growing sectors of the
European economy. The realisation that research and development work on eco-innovation has the potential
to deliver solutions to many of our most pressing environmental challenges while simultaneously providing
opportunities for job-creation, greater industrial efficiencies and sustained economic growth has led to a
greatly increased focus on, and commitment to, this sector in Ireland.
33
In this context, particular emphasis is being placed on our contribution to the ongoing development and
implementation of the EU’s Environmental Technologies Action Plan (ETAP) and the Department of
Environment, Heritage and Local Government’s Environmental Research Programme. This programme is now
known as STRIVE (Science, Technology, Research, Innovation for the Environment) and is operated by the
Environmental Protection Agency (EPA) on behalf of the Department.
Under ETAP, and as part of our own national action, numerous steps have been taken including the
development of a National Steering Group to provide for greater co-ordination and efficiency and the
integration of environmental research across a range of policy sector areas. An ETAP specific research call was
launched by the EPA in 2006 with an initial €3 million in funding being made available to 15 successful projects
on a range of topics such as nanotechnology, membrane reactors, slaughterhouse waste water and anaerobic
digestion. The initial output received under the various projects was deemed to be very positive and it is now
intended that similar calls for research will be launched in 2007 and the following years.
Under the STRIVE Programme, which operates under the aegis of the NDP 2007 – 2013, some €93 million has
been made available for environmental research. This is a significant increase from the €40 million that was
funded under the outgoing NDP 2000 – 2006 and flags the importance that the Government places on this
area. The research will be conducted under 5 Themes, namely, Sustainable Development, Cleaner Production
and Environmental Technologies, A Healthy Environment, The EPA Environmental Research Centre and
Capacity and Capacity Building. In addition to the €93 million that is being made available under the NDP, a
further €8 million is being made available in conjunction with the Government’s Strategy for Science,
Technology and Innovation (SSTI) for research on climate change, transboundary pollution and earth
observation.
3.5.6 Biodiversity
Ireland’s National Biodiversity Plan sets out a cross-sectoral programme of work aimed at securing the
conservation and sustainable use of biodiversity. In January 2007, a public awareness campaign was launched to
promote greater awareness of biodiversity amongst the public and key impacting sectors such as agriculture,
forestry, construction and tourism. As part of this process, biodiversity guidelines are being prepared to assist
industry in safeguarding biodiversity in their operations. The Department of the Environment, Heritage and
Local Government will shortly be commencing work on the development of revised biodiversity strategy
which will incorporate, where possible, the EU Action Plan on halting biodiversity loss by 2010 as well as
obligations arising from the Convention on Biological Diversity.
3.5.7 Climate Change
Pursuant to Council Decision 358/2002/EC, Ireland is required to limit its average annual emissions to 13%
above base year levels in the period 2008-2012. Ireland’s emissions were 25.4% above base year levels in 2005,
an increase on 1.9% on 2004 emissions. The main contributing factors for this increase were increases in fuel
consumption in the transport sector and increased use of peat in power generation.
Ireland’s National Climate Change Strategy 2007 – 2012 was published on 2 April 2007. The purpose of the
Strategy is firstly, to show clearly the measures by which Ireland will meet its 2008 - 2012 commitment under
the Kyoto Protocol; secondly to show how these measures position Ireland for the post 2012 period; and
thirdly, to identify the areas in which further measures are being researched and developed to enable Ireland
to meets its 2020 targets as adopted by the European Union. The Strategy shows that the measures to reduce
emissions that have been put in place by the Government will enable Ireland to meet its Kyoto Protocol
commitments.
Among the new measures in the Strategy are commitments to increase the thermal performance standards in
national building regulations by up to 40% from 2008, to introduce an environmental levy on incandescent light
bulbs and to introduce a dedicated multi-annual cclimate change awareness campaign.
The Strategy also gives an indication, in light of the emissions reduction targets for 2020 adopted by the 2007
Spring European Council, of the additional effort that will be required in Ireland up to 2020.
34
In respect of the EU Emissions Trading Scheme, the total allocation of allowances for Irish participants in the
second phase (2008-2012) of the scheme has now been agreed with the European Commission. An amended
National Allocation Plan will be issued for public consultation by the Environmental Protection Agency in
September 2007.
3.5.8 Marine
The Marine Institute has initiated measures to ensure the sustainable use of resources and to strengthen the
synergies between environmental protection and economic growth. The three key contributions are in the
development of Ocean Energy, monitoring and research of marine biological diversity and implementing
Climate Change research programmes. Phase 1 of the Ocean Energy strategy is almost completed (20052007), facilitating the development and testing of large scale prototype concepts and developing technical and
research leadership nationally.
The Marine Institute provides sheltered test facilities for developers of Ocean energy devices in Galway Bay.
Two companies have deployed ¼ scale devices at the test site. The Marine Institute is preparing for Phase 2
(2008 to 2010) to support the development of pre-commercial grid connected devices. A detailed study is
being undertaken to assess the most suitable location for an off-shore full scale test facility.
The Marine Institute is also actively promoting research to halt the loss of biological diversity. The core
activities of the Marine Institute involve monitoring of fish populations and abundance and diversity of marine
species and protection of aquatic habitats. The Marine Institute is funding research into marine biological
diversity. Under the Government’s Strategy for Science, Technology and Innovation 2006-2013, an Integrated
Marine Exploration Programme is being implemented. A team of researchers have been recruited into the
Marine Institute.
3.6
Internal Market
Guideline 12: Extend and deepen the Internal Market
3.6.1 Implementation of EU Directives
In the aggregate, Ireland’s Internal market scoreboard figure since 2004 has met the agreed deficit target of
1.5%. Dis-aggregated figures have been 1.2% (July 2004), 1.6% (July 2005), 1.8% (end 2005), 2% (July 2006),
1.2% (end 2006) and 1.7% (July 2007). In the context of the European Council agreement in March 2007 that
the figure should be no greater than 1% from 2009, Ireland has intensified its efforts to ensure timely
transposition of EU Directives.
Ireland has implemented most of the practices referred to in the 2004 Recommendation on best practices on
transposition of EU Directives. In particular, items 1.1, 1.2, 1.3, 2,1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 3.1, 3.2, 3.4, 3.5,
3.7, 4.1, 4.2, 4.4, 4.5, 5.1, 5.2, 5.3 and 5.4 have now been implemented by Ireland. This information was
published in the December 2006 (mini) Internal Market Scoreboard. Ireland believes that Member States must
go "beyond the Scoreboard" in line with the recent Commission Communication “A Europe of Results - Applying
Community Law”, which Ireland welcomes and which is still being examined.
3.6.2 Eliminate remaining obstacles to cross – border activity
The Irish SOLVIT Centre8 provides EU citizens and businesses with a valuable tool for enhancing trust and
confidence between Member States in relation to cross border activities covered by EU legislation. The
Internal Market Information System9 will be a further significant addition to the administrative co-operation
machinery of the Member States.
SOLVIT is a network of 27 EU Member State and 3 EEA State contact points aimed at resolving problems experienced by
citizens or businesses who believe that they are being denied their internal market rights by a Member State.
9 An electronic system of communication and information flows across the 27 EU Member States on internal market issues
and administrative co-operation arrangements laid down in EU legislation. It derives in part from the Services Directive and
the administrative co-operation provisions in that Directive. It is due to become operational on a pilot basis in October
2007 for a number of regulated professions. The Services Directive is expected to be added later.
8
35
3.6.3
Deregulation of Electricity / Gas markets
Electricity
Market share by volume of independent suppliers now exceeds 50%. With the establishment of the Single
Electricity Market in November 2007, it is expected that this share will increase in 2008. Independent
electricity generators accounted for 44% of total capacity in 2006. The Government’s White Paper has
committed to increasing this to 60% by 2010. Ownership of the electricity transmission assets will be
transferred to EirGrid, the independent transmission system operator, by end 2008. Work is also progressing
to establish the Distribution System Operator as an independent subsidiary of ESB. This will mark a further
milestone in enhancing competition and transparency in line with EU internal energy market legislation.
A key element of the White Paper on Delivering a Sustainable Energy Future for Ireland was the decision to
transfer the ownership of the electricity transmission system from ESB to EirGrid by end 2008, underpinning
the independence and transparency of transmission and removing any potential barrier to market entry arising
from ESB’s continued dominance of the power generation and supply markets.
Gas
The Energy (Miscellaneous Provisions) Act 2006, was signed into law in December 2006. It provides, inter alia,
for an expansion of the functions of the Commission for Energy Regulation (CER) to underpin its work on the
all-island energy market, the taking of emergency measures by the Minister in the event of a sudden crisis in
the energy market threatening physical safety or energy infrastructure, the facilitation of full gas market
opening and the regulation by the CER of the activities of electrical contractors and gas installers with respect
to safety.
36
3.7
Competition Policy
Guideline 13: Ensure open and competitive markets inside and outside Europe, reap the benefits of
globalisation
3.7.1 The Restrictive Practices (Groceries) Order 1987 10
Following the abolition of the Groceries Order, it was expected that the prices of items covered by the Order
would be lower going forward than they would have otherwise been had the Groceries Order remained in
place. Central Statistic Office figures have borne out this expectation, particularly when grocery price inflation
is compared with overall inflation.
Since the abolition of the Order the Competition Authority has been monitoring the grocery sector. Later in
2007, the Authority intends to publish, an analysis of developments in the grocery sector, focusing on pricing
trends, market structure and barriers to entry.
3.7.2 Competition Authority Studies
The Competition Authority has undertaken four major studies in recent years, three of which it has
completed and the fourth, and largest, is nearing completion.
Insurance Study
In its report “Competition Issues in the Non-life Insurance Market” the Authority reported on competition in the
motor, employers’ liability and public liability insurance markets. It made 47 recommendations designed to
make the insurance market in Ireland more open, transparent and competitive. The Authority’s
recommendations were directed at a number of bodies including the Financial Regulator, the Department of
Transport and the Motor Insurance Bureau of Ireland. The Financial Regulator has implemented many of these
recommendations, particularly via its Consumer Protection Code published during August 2006.
The Competition Authority regularly reviews the position in relation to the implementation of its
recommendations. As part of that process the Authority is currently engaging with all those to whom
recommendations were directed with a view to progressing their implementation.
Banking Study
The Authority’s report on competition in the non-investment banking sector in Ireland identified anticompetitive problems in the three sectors examined i.e. personal current accounts, lending to small businesses
and the crucial role of the payments clearing system. The Authority made 25 recommendations intended to
mitigate these problems and make the banking industry more competitive. There has been considerable
progress on implementation of the Authority’s recommendations. The personal current account switching
code set up in response to the Authority’s recommendation is having significant success and has led to the
phenomenon of “free banking” for many customers. A business current account switching code has also been
devised and the payments industry has revised its rules of entry.
Professions Study
The professions study is analysing competition in markets for professional services, focussing on engineers,
architects, solicitors, barristers, veterinarians, dentists, optometrists and doctors. In respect of each of these
professions the Authority’s strategy is to release a preliminary report first containing initial proposals for
improving competition and thereby allowing a period of consultation with interested parties before the
publication of a final report.
The Groceries Order prohibited the sale of grocery goods by retailers at below the "net invoice price". Therefore, it
allowed wholesalers and suppliers to determine the minimum retail prices being charged to consumers thereby restricting
price competition in the market. The removal of the Order should stimulate competition, drive increased efficiencies at all
levels of the distribution chain and produce a consequent downward pressure on retail prices from which consumers will
ultimately benefit.
10
37
The Authority has completed final reports in 6 of the 8 professions being examined (engineers, architects,
optometrists, dentists solicitors and barristers) . Reports in respect of veterinary surgeons and doctors are
expected in 2008.
The Authority has no legal basis to “require” the implementation of its final recommendations. However, as
stated above, the Authority regularly reviews the position in relation to the implementation of its
recommendations and, as part of that process, it engages with all those to whom recommendations were
directed with a view to progressing their implementation.
Private Health Insurance
The Competition Authority undertook an analysis of private health insurance ("PHI") in Ireland in 2006/2007.
This was in the context that Ireland’s public policy objective in PHI is intergenerational solidarity whereby the
young subsidise the old by paying the same prices for private health insurance, despite the lower risk they
represent to health insurers. The Authority found that the legislative and regulatory framework designed to
support this decision significantly limits the scope for competition in PHI and made 16 recommendations to
promote competition within these constraints. The Minister for Health and Children has already implemented
2 recommendations and progressed the implementation of 8 more.
3.7.3 The Competition Authority and Advocacy
In addition to its formal series of major Market Studies, the Competition Authority also has a statutory
mandate to advise Government Ministers and other public authorities on competition issues, including the
implications for competition of legislative proposals. The Authority regularly gives such advise either through
published submissions in response to Public Consultation Processes, or informally, on invitation by the
Government Department or public authority concerned. For example, the Authority has published its
submissions in recent times in relation to structural reform in the electricity market, on bus transport and on
public procurement by SMEs.
3.7.4 Enforcement of Competition Law
The Irish system of competition law enforcement has received considerable acclaim of late. This is essentially
due to recent successes in the criminal courts where 18 convictions have been secured so far through
prosecutions brought by the DPP with further trials pending. These are the first criminal convictions on
indictment ever secured in Ireland or in the EU for competition law offences.
3.7.5 Consumer Policy
The Consumer Protection Act 2007, which was enacted in May 2007, is the first major piece of consumer
protection legislation in Ireland in almost 30 years and is also the first and most significant concrete step in a
root and branch review of Ireland’s consumer laws. The principal provision in the 2007 Act was to establish a
new National Consumer Agency. The legislation gives the new Agency a wide and expanded remit with specific
functions in areas such as consumer advocacy, research, education and awareness, enforcement and
information. This expanded mandate will enable the Agency to act as a forceful advocate for consumers and to
ensure that the interests of consumers are fully taken into account.
In addition to establishing the NCA, the 2007 Act also transposed the European Directive on Unfair
Commercial Practices. In transposing the Directive, the legislation provided for the first time in Irish law a
general provision prohibiting unfair trading towards consumers. In addition to providing a general prohibition
on commercial practices which are unfair, aggressive or misleading, the 2007 Act outlawed 31 specific
practices which are deemed to be unfair in all circumstances. These practices include, pyramid selling, prize
draw scams, making false claims in relation to a product or service etc.
The 2007 Act also updated and modernised a significant element of Ireland’s framework of consumer
protection law. In this regard a total of 12 existing statutes have been repealed or replaced, the oldest of
which dated back to 1887.
38
The enactment of the Consumer Protection Act 2007 represents the first significant milestone in modernising
national consumer policy. The changes initiated by the new legislation and the further changes that will arise
from the next stage of the review of national consumer law will ensure that the balance of power will shift
more towards consumers and that the consumer agenda will be brought to the forefront of national policy.
The Commission’s Green paper on the Review of the Consumer Acquis asked Member States and all other
interested parties their views on the future direction of consumer policy for the community. A response was
provided and work has begun on the review of eight specific consumer Directives covering the following:
contracts negotiated away from business premises, package holidays, unfair terms in contracts, timeshare,
distance contracts, unit pricing, injunctions and the sale of consumer goods and associated guarantees.
3.7.6 State Aid rules and Globalisation
The sub-Group of the Enterprise Policy Group (EPG), established on Ireland’s initiative, to consider state aid
rules and globalisation prepared a Report, the recommendations of which were discussed at the EPG meeting
in December, 2006. Ireland looks forward to consideration of these issues being continued within an
appropriate network of State aid experts established by the EU Advisory Committee on State Aid as proposed
in the report of the EPG sub-group.
3.8
Supporting Infrastructure and Cross-Border Projects
Guideline 16: Expand, improve and link up European infrastructure and complete priority crossborder projects
3.8.1
Transport Infrastructure
The “Transport 21” Programme involves capital investment of in excess of €34 billion over the 10-year period
2006 to 2015. The key aims are:


The development of a high quality national transport network improved regional and local public
transport networks and services and
The transformation of the transport network in the Greater Dublin Area, mainly through rail-based
public transport services.
Implementation Progress
Of the seventeen national roads projects completed to date under Transport 21, thirteen were on or ahead of
time and on budget, two were on time but over budget, one was behind time but on budget and one, the
Dublin Port Tunnel, was over time and over budget. Two public transport projects have been completed
under Transport 21. One, the DART upgrade, was completed on time and within budget while the Docklands
rail station was opened ahead of time and at less cost than originally estimated.
The 2nd August saw completion of the first joint North/South road venture- between the Department of
Regional Development Road Services of Northern Ireland, and the National Roads Authority and Louth
County Council in Ireland. It is the first major road scheme to be built as one project across both jurisdictions.
See Annex 3 for further details of Transport 21 projects undertaken from January to August 2007.
Good Practice
In order to ensure compliance with Guidelines and to maintain best practice, Consultants have been appointed
to review (1) the appraisal and (2) the implementation of selected Transport 21 Projects. Advisors have also
been appointed to (1) review business cases prepared by the agencies implementing Transport 21 projects and
(2) provide advice on financial, economic and technical aspects of Transport 21 projects or programmes.
3.8.2 Cross-Border Co-operation
Enterprise Ireland
39
Enterprise Ireland (EI) and Invest Northern Ireland (INI) will continue to deepen their relationship with the
objectives of sharing best practice, increasing the complementarity of their respective services and supports to
client companies and exploring the opportunity for greater synergy in their respective operations for the
benefit of client companies.
Enterprise Ireland is engaged in a number of important cross border initiatives. This includes the very
significant development in the signing of an MoU allowing companies from either jurisdiction to participate in
selected trade missions and making the services of both agencies available to companies based North and
South.
Single Electricity Market
The key priority within the All-island Energy Market Development Framework, jointly published by Ministers
North and South in November 2004, is to have the Single Wholesale Electricity Market (SEM) in place in
2007. There is strong political commitment North and South to delivery of the SEM by the revised target date
of November 2007.
Parallel legislation required to underpin the market was enacted in both jurisdictions in April 2007. The
market entered its ‘go-active’ phase (which includes extensive market trialling) on 3 July 2007 and preparations
are on track for achieving ‘go-live’ on 1 November 2007.
Gas Network
The two Departments and two Regulators have commenced the task of developing a project-driven work
programme for gas, to deliver the objectives set out in the Framework document. In February 2007 the two
Departments jointly commissioned a study to assess the medium to long-term position with regard to
security of natural gas supply on an all-island basis and to consider the scope for a common approach on
natural gas storage and LNG. The study is scheduled for completion in early September. The results of the
study will inform policy recommendations to be developed on the basis of the study’s results.
Electricity/Gas Inter-connectors
Ministers North and South recently welcomed plans by the Transmission System Operators for the
construction of a second North-South electricity inter-connector which will be operational by 2012 at the
latest. The Government has approved plans to construct an electricity inter-connector with a capacity of
500MW between Ireland and Great Britain at the earliest possible date before 2012. The inter-connector,
which will be owned by EirGrid, will enhance security of supply, promote competition in the electricity supply
market and integrate Ireland's electricity system into the wider European electricity market. Construction of
the South-North gas pipeline from Gormanstown to Belfast was completed in 2006.
Telecommunications
As part of the National Development Plan the Government is working with the Northern Authorities to
ensure a better telecommunications infrastructure for the whole island. Working in tandem the two
Governments can stimulate competition and investment in telecoms on the island.
A number of projects in the telecoms sector in the cross border area have been undertaken under the
INTERREG III Cross Border Cooperation Programme 2000-2006. These have included establishing a cross
border network of fibre and duct between Dublin and Belfast, a digital corridor between Armagh and
Monaghan, and the creation of high speed cross border networks between third level institutions in the
North-West.
More strategic telecoms projects are being proposed under the INTERREG IV Programme 2007-2013 to
develop cross border networks and strengthen telecoms infrastructure where possible. For example, one
proposal is an International Connectivity link between North America and the North West of the island, with
a transatlantic telecoms cable being brought ashore near Derry. The aim of this proposal is to improve
International Connectivity and costs in NI with benefits for the North West of Ireland and for telecoms
40
resilience in Ireland. A complementary project to improve the telecoms infrastructure for towns along the
border is also being proposed under the Interreg IV programme.
International Roaming – EU Regulation
A Regulation on mobile phone roaming charges has been agreed at EU level. Ireland strongly supported the
bringing forward of this Regulation. The new regulation will ensure that cross border customers, including
those in the North/ South context, can continue to avail of reduced roaming charges.
Wireless Spectrum Licensing
Ofcom and ComReg recently held an auction process North and South for spectrum. The auction was won
by Persona in both jurisdictions, who now intend to provide services on an all-island basis.
Tourism
Tourism, one of the leading service sectors in the Irish economy, has, under the aegis of Tourism Ireland and
two Administrations North and South, emerged as a leading sector for formal North South economic cooperation.
Tourism Ireland has invested significantly in an all-island e-marketing strategy to capitalise on the increased use
by overseas tourists of the internet in planning and purchasing their holidays. Work has been completed on
the development of 35 international websites which are posted in 14 different languages. The three Tourism
Agencies on the island have created a comprehensive tourism database for the island to support their various
e-marketing initiatives. Smaller tourism providers and associations are being helped to engage with the eworld.
Marine
The Marine Institute is working closely with agencies in Northern Ireland on hydrographic and fisheries
research. This creates an efficient mechanism for sharing infrastructure and technology and knowledge
transfer. For example, the Marine Institute is collaborating with the Maritime Coastguard Agency (MCA) in
Northern Ireland on the Joint Irish Bathymetric Survey (JIBS). JIBS involves a collaborative bathymetric survey
out to 3 nautical miles around the entire coast of Northern Ireland. The project secured EU Structural
funding of €2,133,508 under the Interreg IIIA Territorial Cooperation Programme and is due to be completed
on 30 June 2008.
Since 2002, the Marine Institute and the Department of Agriculture and Rural Development in Northern
Ireland have jointly carried out an integrated trawl and underwater television survey on the prawn (Nephrops
norvegicus) grounds in the western Irish Sea. This routinely involves the exchange of staff and survey data.
The data collected during this survey provides improved assessment of the stock and robust management
advice for Nephrops fisheries in the Irish Sea.
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4 Employment Guidelines
Guideline 17: Implement employment policies aiming at achieving full employment, improving quality
and productivity at work, and strengthening social and territorial cohesion.
Guideline 18: Promote a lifecycle approach to work
Guideline 19: Ensure inclusive labour markets, enhance work attractiveness, and make work pay for
job-seekers, including disadvantaged people and the inactive
Guideline 20: Improve matching of labour market needs
Guideline 21: Promote flexibility combined with employment security and reduce labour market
segmentation, having due regard to the role of social partners
Guideline 22: Ensure employment-friendly labour costs developments and wage-setting mechanisms
Guideline 23: Expand and improve investment in human capital
Guideline 24: Adapt education and training systems in response to new skill requirements
4.1 Labour Market Priorities 2005-2008
As outlined in the National Reform Programme 2005, Irish labour market policy over the period 2005-2008 is
focused on:



Sustaining a high level of employment and low unemployment;
Ensuring an adequate supply of labour to meet the needs of the economy;
Maintaining a strong focus on education and training, including lifelong learning, to ensure the
development of a high skilled, adaptable workforce.
This chapter reports on progress with regard to the implementation of these priorities and reflects the
conclusions of the Spring European Council 2007 and the assessment in the European Commission’s Annual
Progress Report 2007.
4.2 Labour Market Performance11
4.2.1 Labour Force
The labour force increased by 85,800 (4.1%) to 2,194,100 by mid-year in 2007. The increase in the number of
people of working age accounted for nearly 64,000 of this growth with net inward migration making up about
45,000. Over 52% of the demographic increase is attributed to those aged 25-34. Higher participation in the
labour market accounted for an increase of almost 22,000 with 90% of this being attributable to females. The
most significant increases were in the age groups 45-64.
4.2.2
Employment
Overall
By mid 2007 there were 2,095,400 persons in employment, an annual increase of 78,400 (3.9%). The
employment rate was at 68.9%, an increase of 0.8% in the year. Full-time employment accounted for nearly
All labour market data from Central Statistics Office, Quarterly National Household Survey, Q2, 2007 unless otherwise
indicated.
11
42
65% of the annual increase while part-time employment increased by 27,500, to a total of 379,100. The
number of males at work increased by 2.9% (34,000), while female employment increased by 5.2% (44,000) in
the year. The increase in total employment in the three year period since 2004 is 259,200 and the
employment rate increased by 3.4%.
Female
The number of women in employment has increased by 128,400 (17%) in the last three years, to a current
level of 899,400. The employment rate for women is now 60.3%, slightly past the Lisbon target for 2010 of
60%. This represents a 4.5% increase in the employment rate in this three-year period with a higher increase
of 5.5% in the rate for older women (55-64). The number of women in part-time employment has increased
by 47,900 (19%) to reach 294,100 in mid 2007. This represents 32.7% of all women in employment in Ireland.
The number of married women in employment is 428,200, reflecting an increase of 49,400 (13%) in three
years. The female unemployment rate is 4.2%, 0.3% less than the rate for all unemployed persons.
Older Workers
Ireland has experienced a significant rise in the employment of older workers (aged 55 to 64) with
employment rates rising by 4.5% in the past three years. Employment rates for older women increased by
over 5%, with the rate for men increasing by about 3%. The current employment rate for older workers (5564) is 54% (EU27 (2006) – 43.5%), which compares favourably with the Lisbon employment target for 2010 of
50%. The overall employment rate (15-64 years) of 68.9% drops to 61.4% for the 55-59 age category and
drops significantly more to 45.3% for the 60-64 age group. The increase in employment for older workers in
part-time work compared to total employment since 2004 is significantly greater, 34%: 20% respectively. The
difference is more pronounced in the 60-64 age group and particularly among males.
The current Eurostat12 data (2005) shows that the average exit age from the labour force in Ireland is 64.1
years, the highest in the EU (EU25 – 60.9 years). The average exit age in Ireland, broken down by gender is
64.6 years for women and 63.3 years for men.
Youth
The number of persons aged 15-24 in the labour force increased by 0.8% to 337,500, with employment
increasing by 0.4% to 307,900 and unemployment increasing by 1,600 to 29,600. Eurostat 13 data for 2006
shows that youth unemployment in Ireland is 8.6%, the third lowest in the EU and well below the EU average
of 17.3%.
People with disabilities
The employment rate of people with disabilities14 is 37% and the long-term target is to raise it to 45% by 2016.
The aim is to increase the overall participation rate in education, training and employment to 50% by 2016.
Sectors
Sectors which showed strong annual growth to mid 2007 were the Financial and Other Business Services
+20,300 (7.6%), Construction +17,600 (6.7%), Health +11,800 (5.9%), Wholesale and Retail Trade +9,100
(3.2%) and Hotels and Restaurants +8,500 (7.3%). The only sector which showed a decline in growth was
Public Administration and Defence (-500). The occupational categories with the greatest increases were
Personal and Protective Services +16,800 (7.7%), Managers and Administrators +13,500 (4.3%) and Associate
Professional and Technical +13,400 (7.8%).
Regions
In the year to mid 2007, employment at NUTS 2 level grew by 53,800 (+3.6%) in the Southern and Eastern
(S&E) region and by 24,500 (+4.7%) in the Border, Midlands and Western (BMW) region. The unemployment
rate for the S&E and BMW regions stood at 4.4% and 4.8% respectively. At NUTS 3 level employment grew in
all regions (except Mid-West). The Mid-East (+6.9%) and Border (+5.9%) regions showed the highest
percentage increases in employment in this period.
Eurostat: Structural Indicators Database 2005
Eurostat: Long-term Indicators Database 2006
14 CSO, Q1 2004 – Disability Module
12
13
43
Nationality
It is estimated that there were 331,100 foreign nationals aged 15+ in the State, an annual increase of 47,800
(17%). Of these almost 240,000 were in employment while just over 15,000 were unemployed. Nationals
from the EU10+2 account for the largest growing category with 137,500 (41.5%) of the migrant population and
increased by 38,700 (39%) in the year. Migrant workers now account for over 11.6% of the Irish labour force
and 11.4% of employment. Among the sectors of the economy which most rely on employing migrant
workers are the hotel and catering industry sector (29%) and the construction industry (13.%).
4.2.3 Unemployment
There were 98,800 persons unemployed by mid year. The unemployment rate was 4.5%, an increase of 0.2%
on the same period last year. The male and female unemployment rate was 4.7% and 4.2% respectively. The
long-term unemployment rate has dropped 0.1% in the year to 1.3%. There were 28,400 persons in long-term
unemployment, representing an annual decrease of 1,200.
4.2.4 Labour Productivity
In 2005, the productivity of the Irish workforce, as measured by GDP in PPS per person employed, was 29.2%
higher than the EU25 average, with Ireland having the second highest productivity rate among EU27 States,
according to CSO15 data published in April, 2007. In terms of GDP, productivity per hour worked in Ireland
has been progressively higher than the EU15 average since 1997 (20.9% higher in 2005).
4.2.5 Vacancies
In 2006 a record total of 144,000 vacancies were notified to FÁS 16. The Economic and Social research
Institute (ESRI) conducts a monthly employment and vacancies survey for FÁS. This survey provides up-todate information on how the labour market is performing. The survey shows that the percentage of firms
reporting vacancies averaged 14.5% in the first 8 months of 200717.
4.2.6 Labour Market Outlook
The ESRI has forecast employment growth of 50,000 in 2007 with an unemployment rate of 4.8%. A
significant decrease in employment growth is forecast for 2008 with a corresponding rise in the unemployment
rate.
4.3 Flexicurity
The term flexicurity refers to the combination of labour market flexibility and security of
workers/employment.
There is no “one-size-fits all” approach to flexicurity. Each country must develop the pathway which is best
suited to its own situation and traditions. However, the elements as set out in the four pillars are essential
components and the following is an outline of developments in Ireland across these areas:
 Flexible and reliable contractual arrangements
CSO Measuring Ireland’s Progress 2006
FÁS Annual Report 2006
17 FÁS/ESRI Monthly Vacancy Bulletin August 2006
15
16
44



Comprehensive lifelong learning (LLL) strategies
Effective active labour market policies (ALMPs)
Modern social security systems
The emphasis in Ireland is to achieve a balanced mix of policies in relation to employment rights, welfare
benefits, income tax and training/upskilling. This is designed to give people the incentive to increase
employability and the incentive to work. It is also designed to help people to make the necessary transitions
from unemployment to employment and from one job to another or to another level within the same
employment.
4.4 Flexible and reliable contractual arrangements
4.4.1 Employment Rights
Anyone who works for an employer, for a regular wage or salary, has automatically a contract of employment
whether written or not. Many of the terms of a contract of employment may emerge from the common law,
statutes or collective agreements made through trade unions or may be derived from the custom or practice
in a particular industry. The Terms of Employment (Information) Acts 1994 and 2001 provide that an
employer must provide an employee with a written statement of certain particulars of the terms of
employment. The Acts, in general, apply to any person –
 working under a contract of employment or apprenticeship
 employed through an employment agency or
 in the service of the State
Within this legislative framework there is flexibility as regards the nature and type of contract (permanent,
fixed-term, part-time etc.).
There is a strong body of employment legislation in Ireland to ensure that workers rights are fully protected
under the various contracts. New legislation has been introduced in recent years to protect employees who
are engaged in more flexible type work such as part time employment and fixed-term contracts. A balance has
been sought between, on the one hand, maintaining workers security in terms of their conditions of
employment while, on the other, due regard being taken of the flexibility required by employers in terms of
organising work and/or work patterns and seeking to ensure that job creation is not inhibited through overly
rigid regulation. Within the body of legislation employers have the freedom and flexibility to organise their
workplaces to take account of their particular needs and circumstances. The consensus and partnership
approach of consultation and dialogue with the social partners and other interested parties has assisted in the
provision of a modern and relevant body of employment law.
The enforcement and complaints mechanisms available operate objectively, fairly and impartially. The National
Employment Rights Authority (NERA) was established in February 2007 to promote compliance with
employment rights legislation and to provide information on employment rights. The general approach of the
new compliance model is that matters be resolved at the level of the workplace where possible. The package
of measures will include a trebling of the number of Labour Inspectors together with more staffing resources
for the adjudication bodies. Penalties for non-compliance range up to €250,000 with adjudication bodies being
able to award up to two years pay by way of redress. In addition, the employment permits system has an
important contribution to make in the protection of individual worker's rights and supporting employment
standards.
Contributions have been made to the open consultation process on the EU Green Paper on modernising
labour law in order to ensure the greater adaptability of workers and enterprises to meet the challenges of
globalisation. A Commission Communication is awaited which will further enhance progress in this area.
4.4.2 The National Workplace Strategy
The National Workplace Strategy, developed in 2005, is the roadmap for producing workplaces that are
adaptable and agile and that balance flexibility with security. The second report from its High Level
Implementation Group was published in April 2007 and the main achievements under the Strategy’s priority
themes include:
45

Promoting Workplace Innovation: In January 2007, a Workplace Innovation Fund of €9 million over a
three-year period was announced. It includes three elements - support for workplace innovation
initiatives in the private sector; support for social partner initiatives; and the launch of a major
campaign to raise awareness of the Strategy among employers and employees across all sectors of the
economy.

Promoting capacity for change: There have been a number of initiatives in relation to support for
leadership and management development, employee information and consultation, employee financial
involvement and work at the National Centre for Partnership and Performance.

Developing future skills: Key developments include the increased funding being provided for training and
lifelong learning activities and the publication of the Fifth Report of the Expert Group on Future Skills
Needs detailing the nature and extent of the challenge in upskilling the labour force to the requisite
levels.

Access to Opportunities: The Equality Authority published a national strategy for Ireland and progress
was made on new initiatives to recruit people with disabilities and support women returning to the
workforce as well as the new arrangements for migrant workers.

Quality of Working Life: Progress is continuing on the issue of workplace bullying, including the launch
of a new Code of Practice from the Health and Safety Authority and the establishment of the National
Employment Rights Authority.
4.4.3 Flexible working arrangements
The National Framework Committee for Work/Life Balance Policies has a mandate to support and facilitate
the development of family friendly policies at the level of the enterprise. One of the key tasks of the
Committee is to examine how best to improve access to family friendly working arrangements in order to
realise the potential benefits that these arrangements would offer from both an equality and competitiveness
perspective. Funding of €278,000 is being provided in 2007 to support the work of the Committee. A range
of activities have been undertaken by the Committee since its establishment in 2000, including the organisation
of Work/Life Balance Day on an annual basis; the provision of direct financial assistance to organisations; the
provision of expert assistance to individual organisations; the development of a range of supports and tools to
assist employers and employee representatives; the development of an interactive website; information
dissemination and exchange activities, and research.
4.4.4 Health and Safety
In 2006 work related fatalities reported to the Health and Safety Authority dropped to 50 compared to 74 in
2005. Agriculture and the Construction sectors were the main contributors. Ireland’s non-fatal incident rate
is considerably below the EU15 average in both these sectors. Non-fatal injuries reported to the Authority in
2006 amounted to 7,844. In 2006, progress under the Construction Skills Certification Scheme (CSCS) and
the Safe Pass scheme continued strongly with 16,000 CSCS and 161,000 Safe Pass cards being issued. In
addition, two special training programmes, ‘Steps to Safety’ and ‘Safe and Well’ were launched in December
2006 to link basic education to health and safety issues. A Code of Practice for the Prevention of Accidents
and Occupational Ill Health in Agriculture was introduced in January 2007. It identifies the data available on
fatalities, injuries and ill heath in farming and sets out approaches to reduce such occurrences. A Code of
Practice for Employer and Employees on the Prevention and Resolution of Bullying at Work came into effect in
May 2007. It requires employers to manage work activities in such a way so as to prevent, as far as reasonably
practicable, improper conduct or behaviour at work.
In September 2006 the Safety, Health and Welfare at Work (Construction) Regulations 2006 was enacted.
These Regulations, concerning one of the economic sectors with the highest numbers of fatalities, enhanced
design and management requirements introduced in earlier regulations in 1995 and 2001. The changes include
modern contractual arrangements between Clients and Project Supervisors and timelines for Project
Supervisors to be in place and duties set out for all those involved. To accompany these Regulations the
Health and Safety Authority have produced detailed guidelines.
In June 2007 the Safety, Health and Welfare at Work (General Applications) Regulations 2007 were finalised.
These Regulations replace a range of earlier law as well as retransposing a number of EU Directives on
occupational safety and simplify legislation by including in one text virtually all of the specific safety and health
46
laws, which apply generally to employments. To accompany these Regulations the Health and Safety Authority
is currently in the course of producing guidelines.
4.4.5 Wage Settings
In the last year the wage agreement negotiated under the Social Partnership Agreement provides for three
increases as follows - 3% from 1st December 2006; 2% from 1st June 2007 (2.5% for those earning €400 or less
per week) and in 2007 the NMW increased twice - to €8.30 per hour from 1st January and to €8.65 from 1st
July, a total increase of 13% since 2005. In the latest survey on the impact of the minimum wage, the ESRI 18
estimate that the percentage of workers on the national minimum wage has reduced substantially from 21% in
1999 to 5.2% in 2005/6. In addition, the fixing of minimum rates of pay and the regulation of conditions of
employment in sectors where collective bargaining is not well established and wages tend to be low are
regulated by Joint Labour Committees. The rates of remuneration and conditions of employment are set
down by way of Employment Regulation Orders.
4.5 Comprehensive lifelong learning (LLL) strategies
The competitiveness of the Irish economy depends on a well functioning labour market. In line with the
Lisbon Agenda, the overall objective is the development of the economy into one that is knowledge-based,
innovation-driven and inclusive labour market and education policies will play a significant role in achieving this
goal. The concept of lifelong learning encompasses all learning activity undertaken throughout life. Eurostat19
data for 2006 shows that 7.5% (+1.6% in 3 years) of all persons in Ireland aged 25-64 participated in lifelong
learning (EU25 10.1%).
4.5.1 Funding
Over the period of the National Development Plan 2007-2013, the Government will invest €7.7 billion in
public funds to support training and skills development. This is a significant increase when compared with the
level of spending over the previous seven year period (2000-2006) of €5.9 billion. The current level of
investment reflects the importance the Government attaches to maintaining an educated, skilled and adaptable
work force in Ireland. The NDP will focus on the following areas:


Upskilling the Workforce
Activation and Participation of Groups Outside the Workforce
Upskilling the Workforce will include measures to improve training for people in employment, help upskill those
affected or likely to be affected by industrial re-structuring, improve and enlarge the apprenticeship system and
provide progression opportunities for school leavers. A total of €2.8 billion has been provided for to support
these measures over the lifetime of the NDP.
Activation and Participation of Groups outside the Workforce will include measures to provide targeted training and
services to groups outside the workforce such as the unemployed, people with disabilities, lone parents,
travellers, prisoners as well as encouraging the increased participation of women, older workers, part-time
workers and migrants in the workforce. A total of €4.9 billion has been provided for to support these
measures over the lifetime of the NDP.
Lifecycle Approach
Under the Social Partnership Agreement a “lifecycle approach” to employment and training has been set out
with the supports available to the individual at each stage of the life cycle. Developments in relation to these
areas are as follows:
4.5.2 Lifelong Learning
The National Development Plan 2007-2011, Towards 2016, the National Action Plan for Social Inclusion 20072016 and the Programme for Government all restate the Government’s commitment to Lifelong Learning,
18
19
ESRI: The Minimum Wage and Irish Firms in 2005
Eurostat: Long-term Indicators Database 2006
47
with a focus on enhancing access to training, the development of new skills, the acquisition of recognised
qualifications and progression to higher level qualifications.
The Government recently appointed a Minister of State for Lifelong Learning with responsibility for overseeing
and ensuring a coordinated approach to lifelong learning in both the Department of Education and Science and
the Department of Enterprise, Trade and Employment. The Minister will also have responsibility for improving
access to lifelong learning.
Continued priorities in the implementation of the framework for Lifelong Learning include:

Addressing skill needs and widening access to lifelong learning in the context of an integrated
approach to education and training;

Tackling disadvantage in terms of literacy and numeracy, early school leaving and providing second
chance education and training for those with low skills;

Addressing access barriers through a strengthening of financial supports, guidance, counselling and
childcare services and increased flexibility of provision.
4.5.3 Early Childhood Education
The Centre for Early Childhood Development and Education (CECDE) was set up to provide advice and
support in all areas of Early Childhood Education (0-6 years). This includes developing targeted interventions
on a pilot basis for children who are educationally disadvantaged and children with special needs. In 2006, it
published its' National Quality Framework Síolta which aims to develop a national quality framework for early
childhood education applicable in a variety of settings where education and care are integrated.
Pre-school education is provided in the main by privately funded childcare facilities. However, the State funds a
number of pre-school initiatives, focusing in particular on children at risk. These initiatives include the Early
Start programme and the provision of Traveller pre-schools.
4.5.4 Educational Disadvantage
Annual investment of €40m additional funding for early childhood education is made available under DEIS – the
Action Plan for Educational Inclusion (2005-2010) on full implementation. The action plan focuses on
addressing the educational needs of children and young people from disadvantaged communities, from preschool through second-level education (3 to18 years). It includes a new integrated School Support Programme
(SSP), which will bring together, and build upon, a number of existing interventions in schools with a
concentrated level of disadvantage. 300 additional posts will be created across the education system generally
to reduce class size and help tackle problems of disadvantage.
4.5.5 Early School Leavers
The EU 2010 targets for education are that at least 85% of 22 year olds in the EU should have completed
upper secondary education and that the average rate for early school leavers should be no more than 10%.
Eurostat20 data for 2006 shows that 85.4% of the Irish population aged 20-24 have completed at least upper
secondary level education (EU25 77.7%). The rate of early school leaving for 2006, as indicated by Eurostat 21,
was 12.3% (EU25 15.1%). Actions being undertaken to increase participation in education reflect the policies
outlined in the European Youth Pact on the need to provide education and training to address the labour
market challenges facing young people.
Programmes
The School Completion Programme (SPC) is now integrated into the new School Support Programme. It
targets persons aged 4-18 at risk of early school leaving and arranges supports to address inequalities in
20
21
Eurostat: Long-term Indicators Database 2006
Eurostat: Long-term Indicators Database 2006
48
education access, participation and outcomes. 125 SCP project sites, comprising 224 post-primary and 467
primary schools, will participate in the Project strand of the School Completion Programme from 2006/2007.
Fifteen additional posts have been allocated to the National Educational Welfare Board (NEWB) for 2007
which will facilitate an increased response to more children with attendance difficulties. In addition, a group
comprising representatives of the NEWB, the School Completion Programme and the Home School
Community Liaison has identified a number of regions where the three teams will work together to identify
particular issues that contribute to absenteeism and to develop operational guidelines. This work will
commence in the new school year (2007-2008) and operational guidelines will be agreed by the end of the
year.
Progression
A series of interventions are available to meet the needs of early school leavers, such as foundation-training
places, bridging training programmes for access to higher skills training, advisory supports to assist progression
and flexible part-time and work-based options. In 2006, 46% of participants (42% of women and 49% of men)
proceeded to employment, education or further training, a significant improvement on 2005, which had 38%
placements. A follow-up survey results, for 2006, showed that 52% of participants (58% of women and 41% of
men) had proceeded to employment, education or further training. They also showed that 49% of participants
(53% of women and 40% men) achieved a recognised improvement in their literacy and/or numeracy level.
In 2006, a total of 71% of trainees on Youthreach programmes progressed to either full-time employment of
further education training while the progression figure for trainees on Traveller training courses was 42%. An
increase of €8m for Youthreach was provided for in 2007 for the expansion of the number of places by 400,
bringing the total to over 3,600. This will rise by a further 600 by the end of 2009.
4.5.6 National Skills Strategy to 2020
The National Skills Strategy was launched in March 2007. It has identified trends that point to increasing
demand for those with high level skills and a relative decline in demand for those with low-level skills. The
trends show a continuing shift towards the services and high value added manufacturing sectors. They point to
increasing employment in managerial, professional, associate professional, personal and service and sales
related occupational groups and an increasing emphasis on generic skills including basic skills such as literacy,
numeracy and using technology. It predicts that the Irish economy is likely to need 950,000 extra new
workers between 2006 and 2020. This demand will be met through the young school leaving cohort, through
increased participation and continuing to attract inward migration. The skills requirement will be met only by
re-skilling and upskilling the resident workforce and by attracting highly skilled migrants.
The Strategy sets out clear long-term objectives to achieve a significantly improved educational profile for the
labour force:
 Increase the upskilling of 500,000 people in employment. The Strategy indicates that over 70% or
1.43 million of our current workforce will still be in employment in 2020.
 Ensure that the output from the education system reaches its potential, through improving
participation rates in upper secondary level to 90% and ensuring the progression rate to third level
increases to 70%.
 Address the skills needs of the immigrant population and those re-entering employment.
The focus is now on implementing the recommendations contained within the National Skills Strategy including
the identification of the precise mechanisms that will be used to implement these recommendations. The
Expert Group on Future Skills Needs is to identify the most suitable initiatives to incentivise employers and
employees to fully engage in training and education. The Group will report annually on progress in relation to
the findings contained within the National Skills Strategy.
FÁS One Step Up Initiative
All FÁS programmes and initiatives are aligned to the One Step Up concept that training and development
programmes assist individuals to build on their competency levels and obtain a recognised qualification within
the National Framework of Qualifications. One Step Up aims to encourage employee training to increase
employee's competency levels and promote an ethos of lifelong learning in the workplace. It does this by
providing easy access to a range of learning initiatives such as tutor-led training and e-learning. It aims to
ensure that skill and qualification levels in the workforce match present and future human resource
49
requirements for continuous economic growth and competitive advantage. It will also enable employees to
cope with frequent and ongoing changes in work practices. It has a budget of €43m in 2007 and is subsidised
through two primary funding mechanisms: Competency Development Programme (CDP)
It offers many different types of training progremmes directed at various skill levels of those in employment
across multiple sectors. Funding has increased from €8.5m in 2004 to over €35m per annum in 2005 and
2006.
Workplace Basic Education Fund
It targets employees with the lowest skills levels (including early school leavers) and particularly those with
difficulties with literacy and numeracy. The allocation was increased in 2007 to €3.046 million (€2m in 2005).
Since its inception 3,370 people have registered for participation in the programmes operated under the fund.
Skillnets
Training Networks Program (TNP)
The TNP, operated by Skillnets, supports workplace training by enterprise-led networks of companies. The
networks themselves identify required training in the light of the business of the member companies. The
budget for the TNP was increased in 2007 to €13million (2006 - €8.5m and 2005 - €7.5m). The TNP has a
broadly based mandate in terms of enterprise/economic sectors - particular priorities are SMEs and the lower
skilled. TNP now provides support of up to 75% for training networks, with the possibility of higher support
levels for certified training and training for the lower skilled. In 2006, under the TNP, Skillnets supported
training in over 4,700 companies, of which some 3,800 were SMEs. The number of trainees was 14,420 with
over 38,000 training days delivered.
ACCEL Programme
ACCEL is aimed at groups of companies as opposed to formal networks. Also, social partner organisations
and county enterprise boards are eligible to apply for ACCEL support. Particular emphasis is placed on
facilitating enterprise and educational collaboration. ACCEL runs for the period 2006 to early 2008 with a
budget of €16 million. The ACCEL budget is fully committed to 54 approved training projects who spent
some €6 million in 2006 and are expected to engage in training in 2007 at a total ACCEL support cost of
about €10 million.
Apprenticeships
The Standards Based Apprenticeship Programme is a demand-driven, statutory-based, alternance system aimed
at training workers in the craft trades. The apprentice population continues to grow and there are now nearly
30,000 apprentices registered across the 23 trades currently designated under the programme. FÁS resources
for apprenticeship were increased by €15m for 2007, bringing their total allocation to €129m. The Institutes
of Technology are also expanding their apprenticeship training capacity this year.
4.5.7 Adult Literacy
In 2007, it is expected that €30 million will be spend on Adult Literacy Activities (up €7m on 2006) with 3,000
additional places available. Towards 2016 also provides for an extra 4,000 places between 2008 and 2009 to
bring the total to 42,000.
4.5.8 Higher Education
The most recent data22 shows that 136,719 persons are in full time third level education. It shows that
approximately 25% of those aged 15-64 had a third level qualification in 2005, an increase of 5% on 2002. The
national system of innovation and higher education system is strongly research and innovation oriented aiming
for mutually beneficial interaction with the enterprise sector, with two overarching goals:
 To build up a sustainable system of world class research teams in terms of people and supporting
infrastructure;
 To double the output of PhDs by 2013.
One of the ways of achieving this is through the Strategic Innovation Fund (€510m) which is intended to be a
major catalyst in bringing about substantial change and quality improvement in the higher education institutions
and promoting system-wide collaboration that draws on all institutions collective strengths.
22
CSO – Educational Attainment 2002-2005 module
50
4.5.9 National Framework of Qualifications (NQAI)
The aim of the national framework of qualifications is to provide a unified framework across all awards in the
State, which will enhance recognition of qualifications, improve access, progression and mobility for learners
and employees, and support flexible high quality education and training. Its work is closely linked with the
National Skills Strategy where the focus is on upskilling people to the next level within the NQAI.
All awards issued by the Higher Education and Training Awards Council (HETAC) since 2005 are issued under
the new framework and the new quality assurance and programme validation procedures. All awards at
Bachelor Degree, Master’s degree and doctorate level in the university sector are issued under the new
framework since 2005. Work is ongoing regarding the inclusion of certificate and diploma programmes in the
new system. All providers under the Further Education and Training Awards Council (FETAC) were required
to seek to have their quality assurance agreed under the new system in the period to the end of 2006.
HETAC issued 23842 awards in 2006 while FETAC issued 110,296 awards. Other key developments in 2006
include:
 A review of the effectiveness of HETAC was completed in 2006 by an international review panel
commissioned by the NQAI with a positive outcome.
 The NQAI issued a publication regarding policies and criteria on the inclusion in, or alignment with,
the National Framework of Qualifications of the awards (or the learning outcomes associated with
them) of certain international and professional awarding bodies.
 Continued expansion of the scale of activity of Qualifications Recognition Ireland, the one stop shop
established by the Authority, to advise on the comparability of international awards. The service has
played an important role in providing advice on the recognition of international qualifications for
recent recruitment drives to the Gardai and the Defence Forces, as well as offering advice to migrants
seeking access to further learning or employment.
 FETAC pilot project to develop good practice guidelines on the Recognition of Prior Learning was
completed.
 Ireland verified the compatibility of its National Framework of Qualifications with the Bologna
Framework (the Framework for Qualifications of the European Higher Education Area).
4.6 Effective active labour market policies (ALMP)
4.6.1 Prevention and Activation23
The Preventive Process, in existence for nine years, involves a systematic engagement with the unemployed to
assist progress towards employment, training or active labour market programmes. During 2006, 37,959
persons were referred to FÁS with 25,186 attending for interview. Of those interviewed, 14,702 left the live
register, with 6,429 placed in jobs, programmes, training and education. Persons unable to progress to training
or employment, i.e. ‘not progression ready’, accounted for 3.3% of FÁS interviewees.
A positive review of the process was carried out in 2005. Following this, in 2006, it was (i) extended to 55-64
year olds and (ii) the engagement threshold was reduced for all from 6 to 3 months. The results in 2006 show
that progress under both elements of the process is more difficult than that experienced within the process as
a whole with a lower proportion having left the live register or being placed in jobs etc. Assistance is provided
to help overcome personal barriers to the labour market through the High Supports Process.
Work is ongoing to further extend the Preventive process to other groups such as lone parents and those
with disabilities, with due regard to the special needs of these groups. A number of pilot initiatives have
already taken place, based on voluntary participation and the results of these are currently being evaluated.
The process is operated in a supportive and positive manner working in an inclusive way with each individual.
Four lone parents voluntary activation initiatives were implemented by FÁS to test approaches and to identify
barriers in activating individuals in receipt of the One Parent Family Payment. These initiatives were based on
the process in place for women returnees with additional elements relevant to the needs of lone parents. It
involved targeting lone parents living in an area, who had previously registered with FÁS, with a view to
National indicators to measure performance against certain aspects of the European Employment Strategy are outlined
in Annex 5.
23
51
offering tailored programmes and supports to assist them enter/re-enter employment on the open labour
market. In February 2007 an evaluation of this initiative was proposed, the aim of which is to provide an indepth analysis through a follow-up survey. A final report is due in the Autumn.
Under the preventive process an employment pilot operated by Careerlink 24 aims to assist disabled people
enter employment on the open labour market, who are about to exit from training (specialist or mainstream),
Community Employment and/or education (VEC or third level). Following a two-month Job-seeking
programme, as part of this initiative, the results show that about 50% of participants are currently active in
employment and 40% are to obtain additional training in job seeking skills.
High Level Group
A High Level Activation Group, comprising representatives from Government Departments/Agencies and the
social partners has been set-up to progress the activation of other client groups, including lone parents and
disabled people.
The OECD is currently carrying out a study into Activation policies and Ireland is one of a small number of
countries that it is engaging with directly on this issue. A report is due to be completed early in 2008.
4.6.2
Redundant Workers
Company Closures
FÁS provides an integrated support service for people being made redundant because of company
restructuring or closures. This involves information sessions, skills analysis, training/retraining courses and job
placement. In the delivery of these services, FÁS liaises with other relevant agencies such as Enterprise
Ireland, IDA Ireland, the City/County Enterprise Boards and the Department of Social and Family Affairs.
Where required, FÁS may set up an inter-agency Task Force to mobilise the totality of the supports available
through the relevant agencies. FÁS also works closely with the agencies to identify and support individuals
who wish to start their own business.
4.6.3
Older Workers
Age discrimination does not form part of employment rights legislation and there are no provisions in
Employment or Equality law that impose a compulsory retirement age in relation to employment. The
Employment Equality Acts 1998 and 2004, among other things, protects against discrimination on the ground
of age in relation to access to employment. However, it also permits an employer to decide on a retirement
age in relation to a particular employment. The usual retirement age is 65. The mandatory retirement age of
65 has been removed for all new entrants to the public service.
Some initiatives have already been put in place to encourage older workers to remain in or return to the
workforce –
 The extension of the preventive process to 55-64 year olds, together with the elimination of the PreRetirement Allowance (PRETA) on a ‘no new case’ basis with effect from July 2007. Existing cases
can continue in payment to age 66, although provision remains to exit the scheme for periods of up
to one year’s duration in order to facilitate and encourage moves back into the workplace.
 Since 2004, the Community Employment scheme was extended to allow for those 55+ to avail of a
six-year period to engage in useful work and training within their community, in recognition of the
fact that older participants may find it more difficult to progress into the open labour market.
 Expanding the Workforce, mainstreamed in 2006, provides a gateway for women returnees into the
labour market, many of whom fall within the older age categories.
4.6.4 Active Labour Market Programmes
FÁS continued to deliver a wide range of skills training courses through its network of Training Centres and
contracted training providers to increase the prospects of trainees gaining or returning to employment. The
courses cover a range of technical, practical and soft skills. FÁS also provides a range of services in cooperation with different community groups that focus on the integration/re-integration into the labour market
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52
of long-term unemployed and other marginalised people. A total of 59,830 persons participated in active
labour market programmes in 2006 of which 22,281 were on Community Employment (CE) schemes and
1,559 on Job Initiative. Expenditure details for the principal supports are outlined in Annex 5.
An Expenditure Review of State Supports for the Long-Term Unemployed was completed in 2006, which
reported on the impact of active labour market measures. The overall outcome from this analysis was positive
and a cross cutting recommendation made that ‘the funding being expended on training and education
programmes should be increased and the training element of employment programmes should be significantly
increased’. The progression outcomes and cost effectiveness of these supports is set out below.
Progression outcomes
The programmes, which are best at progressing the LTU to employment or education (i.e. progression rates
of 65% or more) include Back to Work Allowance and all of the education and training programmes including:
Back to Education Allowance, the Vocational Training Opportunities Scheme and the FAS and Sectoral
Training Programmes.
Cost Effectiveness
The programmes, which represent the best value for money (i.e. net cost per positive progression of €13,000
or under) include all of the education and training programmes referred to above and the programmes
providing a wide range of supports including National Employment Services and the Local Development Social
Inclusion Programme – Services for the Unemployed under the auspices of Area Development Management
Ltd.
Expanding the Workforce (ETW)
ETW provides a gateway for women returnees into the labour market, including lone parents. Following an
evaluation in 2005, the programme was mainstreamed in 2006. During 2005/2006 period 2,099 women
registered and 57% were over the age of 45. 717 women completed pre-employment programmes and a
further 493 women completed specific skills training. Of all those completing training 52% received
certification. Recorded progression into employment was low and a follow-up survey on all ETW graduates is
currently taking place. In addition, a review of ETW took place in January 2007. The review examines the
delivery of training, the level of participation in training, and good practice in providing a service to women
returnees.
Lone Parents
The QNHS Q1 2007 shows that 47% of lone parents are in employment, an increase of 3% in the last three
years. A Government Discussion Paper – Proposals for Supporting Lone Parents – was published in February
2006. It puts forward proposals for the expanded availability and range of education and training opportunities
for lone parents; the extension of the Preventive Process to focus on lone parents; focused provision of
childcare; improved information services for lone parents and the introduction of a new social assistance
payment for low income families with young children. The proposals envisage active and compulsory
engagement with employment services when the youngest child reaches a certain age (yet to be defined).
Currently, the One Parent Family Payment (OPFP) is made without any job search requirements until the
youngest child reaches 18 years (or 22 years if in full time education). In addition, claimants who take up a CE
scheme are entitled to keep their OPFP payment. Work is continuing on the development of a crossDepartmental implementation plan to progress the non-income recommendations, in tandem with the
development of the legislation required to introduce a new payment scheme.
People with Disabilities
The Sectoral Plan for People with Disabilities (within the remit of the Department of Enterprise Trade &
Employment), developed under the Disability Act, 2005, covers the period 2006-2010 with proposals for the
Department and its agencies. The Plan includes a number of key initiatives which are aimed at promoting
equal opportunities for people with disabilities in the open labour market, further developing the
mainstreaming agenda, helping people with disabilities to increase their economic and social independence, and
promoting greater social inclusion. The Plan involves the development of a comprehensive employment
strategy with the objective to have at least half (7,000) of those people with disabilities who do not have a
53
difficulty in holding a job in employment. The key pillars underpinning the development of the comprehensive
strategy includes:
 Enhancing the effectiveness of employment and vocational training programmes for people with
disabilities
 Further developing supports to the employment of people with disabilities
Complementary to this strategy, a strategy for vocational training has been developed by FAS, which embraces
mainstreaming, training programmes and delivery, facilities, training supports and costs.
The total FÁS budget for training and employment for people with disabilities in 2007 amounts to some €74
million, representing an increase of some €9 million over the 2006 expenditure. The 2007 budget for specialist
training providers amounts to €53 million approx., while a budget of €8 million is being provided for
supported employment services. The Wage Subsidy Scheme, introduced in 2005, continues to be promoted by
FÁS to encourage employers and potential employees to avail of the incentives under the schemes and to
maximise take-up. The budget allocation for 2007 is €10,500 which is an increase of 58% on expenditure in
2006.
4.7 Modern social security systems
4.7.1 Taxation and Social Welfare Policy
Progressive changes have been made to the income tax and social welfare systems in a systematic way to
increase the rewards of work, to ensure that an adequate out of work-income safety net is provided for the
unemployed and the disadvantaged, to ensure that the incentive to return to the workforce or to remain in it
is maintained and to enhance social inclusion particularly by making work both available and attractive.
Income tax
Budget 2007 introduced a number of changes through increasing tax credits, widening tax bands and cutting
tax rates. It targeted over 55% of the resources in the personal income tax package to those on low incomes,
including the elderly and those with a disability or who care for a person with a disability. The entry point to
taxation has been increased, based on the basic personal tax credit and the employee tax credit, for the single
employee aged under 65 years on the minimum wage by almost 13%. In addition, the employee weekly
threshold for liability to PRSI was also increased by 13%, thus ensuring that no PRSI liability will arise on such a
wage. Measures in Budget 2007 include:
 Minimum wage earners continue to be outside the tax net;
 845,90025 earners are now outside the tax net;
 Approximately 80% of earners pay tax at no more than the standard rate (20%);
 The average wage earner is removed from liability for the higher tax rate (41%);
 Income tax exemption limits for citizens aged 65+ have been raised;
 An extra tax credit applies to those aged 65+.
Social Welfare
Social welfare policy also focuses on a ‘lifecycle’ approach. Within each stage of the lifecycle the emphasis
continues to be on providing an adequate level of social protection for those outside the workforce, while at
the same time encouraging persons to enter and stay in employment.
Child Income Support
The Government remains committed to maintaining the balance between ensuring that child income support
programmes are developed in ways that are sufficiently responsive to need while providing opportunities to
assist people to become less welfare dependent.
In recent years the there has been a significant investment in universal child benefit (CB), from a position
where child benefit represented 27% of the total social welfare child income support to a one child family to
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Post Budget 2007.
54
63%. This CB model ensures an almost 100% take-up rate, is neutral vis-a-vis parental employment status or
earnings and does not contribute to unemployment or poverty traps, whereas the loss of child-related social
welfare payments on taking up employment can act as a disincentive to people transferring from welfare
dependency to work. In other words, a family will now lose only 37% of their child income support when
moving into full-time employment.
Following the above achievements, focus has now moved to reform of targeted child income supports,
illustrating a more selective approach to targeting children in poorer households. In this context, recent
improvements have included the re-focusing of the principal in-work income support for families in lowincome employment with children (Family Income Supplement) in favour of larger families in 2006 and 2007
and an increase and consolidation of the social welfare child-related increases at one uniform rate in 2007.
Access to Employment
It is important that social security programmes have the flexibility to provide a sufficient level of support at
appropriate times while simultaneously avoiding the creation of unemployment and poverty traps. In this
context, a number of measures have been introduced to social security schemes in recent years to make them
more employment friendly by removing disincentives to taking up employment. These include the application
of disregards in the assessment of earnings and the tapered, or gradual, withdrawal of social security as
earnings increase. These measures are complemented by the activation measures referred to under ALMPs.
In addition, a new programme, with a budget of €50m, has been set up under the National Development Plan
2007-2013. The objective of this programme is to promote participation and social inclusion through early
engagement aimed at all people of working age, whether they are unemployed, lone parents, people with a
disability or in some other category. Early engagement will be provided at the primary point of access, the
initial claim stage, delivering more intensive case management than currently takes place. It is envisaged that
this initiative will enhance the existing preventive process and target assistance more effectively to individual
clients.
Pensions
Public service pension provision
Reforms implemented so far have, in relation to most new public servants, allowed for the raising of the
minimum pension age from 60 to 65 and for removal of a compulsory retirement age for most new public
servants (these measures are expected to have a positive impact on future labour supply). A cost-neutral early
retirement scheme with actuarially reduced benefits (facilitating improved labour mobility) has also been
introduced.
Private sector pension provision
Tax incentives to promote private pension provision by way of occupational pension schemes and personal
pension plans and arrangements are longstanding and have been improved in various ways over the years.
Employers are obliged to provide their employees with access to a Personal Retirement Savings Account
(PRSA) if they do not already operate a pension scheme, to facilitate increased supplementary pension
coverage. Up to the end of June 2007, almost 112,000 PRSA contracts have been taken out, with total assets
standing at €1.06 billion. Surveys carried out by the CSO26 show that pensions coverage has been increasing.
Supplementary pension coverage in the workforce increased from 51% in 2002 to 55% in 2005. Coverage for
those over 30 years of age was 62% in 2005, compared to 58% in 2002. The National Pensions Review has
suggested that 70% of those over 30 years of age, in employment, need an occupational or private pension.
(Note : the 70% has not been accepted as definite Government target though it has informed work in this
area).
Green Paper on Pensions
A Green Paper on Pensions has been drawn up, in accordance with commitments in Towards 2016, which
builds on two reports produced by the Pensions Board – the National Pensions Review (2006) and the Special
Savings for Retirement (2006). It sets out the key issues and challenges in this area, including the issues facing
older workers wishing to work after normal retirement age as well the incentives which might be built into the
pensions system to encourage longer working. The Green Paper will be published in October 2007. A
consultation process will be undertaken after the Green Paper is published and, as part of its commitments
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CSO, Q4 2005 – Pension Provision Module
55
under Towards 2016, the Government is to respond to the consultation process by developing a framework
for long-term pension policy.
Social Welfare Pensions
The Government is committed to making changes to social welfare pensions to encourage longer working.
The introduction last year of a €100 per week earnings disregard into the means test for the non-contributory
State Pension was increased to €200 per week in Budget 2007. The new Programme for Government is
committed to extending this amount. In addition, the Government has committed to increasing the social
welfare pension for every year that a person over age 66 delays taking it and making employment after 66 fully
insurable so that a person can improve their pension entitlement by continued employment.
National Pensions Reserve Fund
The Fund has the aim of pre-funding, in part, the future cost of social welfare and public service pensions. It
requires the statutory investment of 1% of GNP annually until at least 2055, with drawdowns prohibited prior
to 2025. The Fund’s value at end-June 2007 was over €21 billion.
4.7.2
Childcare
National Childcare Strategy 2006-2010
In December 2005, the Government established the Office of the Minister for Children (OMC). The OMC is
responsible for all areas of policy and services for children (other than health and school age education
services) and brings together the areas of Child Welfare and Protection, Childcare, Early Years Education,
Youth Justice and the National Children's Strategy 2000-2010.
Under the OMC, the Government launched a new exchequer funded National Childcare Strategy for 20062010. The Strategy includes the National Childcare Investment Programme (NCIP) 2006-2010 which has a
funding allocation of €575 million and a new National Childcare Training Strategy with a target of 17,000
additional childcare training places to be provided by 2010. An inter-Departmental group has been set up to
improve coordination and integration at national and local level between key players, including Local Planning
Authorities and County Development Boards.
Since March 2007 paid maternity leave has been extended to 26 weeks and unpaid maternity leave to 16
weeks. Together with the existing 14 weeks of parental leave, parent’s entitlement to paid and unpaid leave
has been increased to a total period of 56 weeks (or 70 weeks if the father’s parental leave entitlement is also
included). Corresponding increases in adoptive leave were introduced with the same effective date. Improved
statutory provisions for parental leave were introduced in May 2006. The increased entitlements will allow
parents to use a combination of maternity and parental leave to care for their children during the important
first year of life.
Equal Opportunities Childcare Programme (EOCP) 2000-2006
The principal vehicle for the delivery of Government Childcare policy in recent years has been the EU cofinanced Equal Opportunities Childcare Programme (EOCP) 2000-2006. Total allocated expenditure under
the EOCP in 2000-2006 (including EU funds) is expected to amount to just under €500 million of which some
€347 million had been allocated by December 2006. Reported grant receipts for the period up to end 2006
amounted to €138.5 million in capital expenditure (private and community sector childcare providers) and
€209.4 million in current expenditure (community and voluntary sector). Over 60% of the Programme's
beneficiaries, accounting for 87% of grant expenditure, have been community/voluntary groups with a strong
focus on disadvantage. Over €194 million of these grant receipts relate to projects co-financed under the
European Social Fund (ESF), representing an input of €113.5 million from ESF funding.
Over 33,500 new childcare places were delivered by grant beneficiaries, which represented 113% of the target
set for the Programme. The overall total of childcare places, including new places, receiving grant aid under
the Programme now stands at almost 60,000 places and over 2,848 childcare staff receives support under the
staffing grant scheme.
Between 2002 and 2005 (when last reported) the proportion of services offering full day care had increased
from 30.7% to 39.6% and the average opening hours for services had increased from 29.6 hours per week to
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34.5 hours per week with 41.1% offering more than 40 hours of care per week. The proportion of parents
using the services and engaged in employment, education or training has increased from 77.1% to 84%
reflecting the benefits to them of increased access and choice of childcare services.
National Childcare Investment Programme (NCIP) 2006-2010
As with the EOCP, the NCIP makes large-scale capital grants available to childcare providers in both the
private and community sectors. EOCP staffing grant assistance will be replaced by childcare subventions for
community childcare providers in 2008. A target of 50,000 additional childcare places has been set for the
NCIP.
While the NCIP continues to focus on the creation of additional childcare places, it also incorporates a
number of broader objectives, which include improving the quality of early childhood care and education
services, supporting families and breaking the cycle of disadvantage. Greater focus will be placed on preschool places for 3 to 4 year olds and on school age childcare. The target of 50,000 additional childcare places
includes 10,000 pre-school education places and 5,000 school age childcare places.
The new Community Childcare Subvention Scheme was launched in July 2007 and will become operational in
January 2008, with funding in excess of €153 million over 3 years. Community childcare services will receive
subventions to enable them to provide reduced childcare fees to parents who are in receipt of social security
and social assistance payments or are engaged in education, training or work experience programmes where
an underlying entitlement to such a payment is established. They will also receive subsidies for parents who
are in receipt of Family Income Supplement (FIS) (a state payment to low paid workers with dependent
families). Subventions will not be available in respect of parents who are not in receipt of these payments.
However, due to the subsidisation of childcare costs in the community not-for-profit sector through capital
grant aid and other State supports, all parents or guardians using these services will continue to benefit from
quality childcare at a price which is below the economic cost of the service. Subventions for full-day care
places will range from €80 to €30 (€110 to €60 for a child under 1 year) per week, with pro rata subventions
for shorter day care services. The operation of the scheme and the subventions provided will be subject to
on-going monitoring and review to ensure optimum outcomes for parents.
Under Towards 2016 it is proposed to review the NCIP to assess progress and to develop new policy
responses and successor programme(s) appropriate to emerging needs in childcare.
4.7.3
Child Support
Early Childcare Supplement (ECS)
A new payment for all parents of children aged under 6 years was introduced in 2006 to assist parents with
the cost of childcare in the early years, which is usually higher than school age childcare. The ECS is a direct,
non-taxable quarterly payment amounting to €1,000 per child per annum and is expected to cost the
exchequer over €400 million in a full calendar year.
Childminding Relief
Tax relief introduced last year on income from childminding where an individual minds up to three children
(not their own) in their own home was further enhanced with the exemption limit raised by 50% to 15,000.
4.8 Gender Equality
4.8.1 National Women’s Strategy
In April 2007, a National Women’s Strategy 2007–2016 was published. The Strategy addresses three themes –
(i) Equalising Socio-Economic Opportunity for Women; (ii) Ensuring the Wellbeing of Women and (iii)
Engaging Women as Equal and Active Citizens. The Strategy includes 20 Key Objectives and over 200 Key
Actions designed to advance gender equality over the next ten years. A funding package of €58 million has
been set aside under the National Development Plan 2007–2013 to facilitate the implementation of the
Strategy.
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4.8.2 Equality for Women Measure
The Equality for Women Measure under the National Development Plan 2000-2006 was a positive action
initiative designed to tackle the attitudinal, cultural and structural barriers to women's equal participation in
economy and society. €30 million has been provided to organisations to deliver positive action projects for
women in their communities, in education and training, in work and in decision-making. Over 6,000 women
will have availed of training under the Measure and many have returned to employment or advanced up the
career ladder. To build on the work already done, funding of €68 million is provided for the next phase
under the new National Development Plan 2007-2013. The aim is to continue to tackle educational and social
barriers to women entering and progressing within the workforce with particular focus on disadvantaged
women. Details of the new Measure will be announced in Autumn 2007.
4.8.3 Gender Mainstreaming
Gender mainstreaming is to be implemented as the principal instrument for the achievement of gender equality
in Ireland. In this regard a number of key actions have been outlined and agreed across all Government
departments including the establishment of formal Gender Mainstreaming supports in Government
departments by end of 2008 and the establishment of a central Gender Mainstreaming Unit to provide training
and support to other Departments.
4.8.4 Gender Pay Gap
The gender pay gap has fallen consistently and is now below the EU average of 15%. The most recent official
figures from Eurostat27 (2005) put the gender pay gap at 9%, placing Ireland fourth lowest among the EU27.
This compares with a rate of 14% in 2003, showing a drop of 5% in two years.
The introduction of the national minimum wage in 2000 has had a positive impact on women who previously
were more likely to have received very low wages in sectors which were predominantly female. Prior to this
the gender pay gap was at 22%.
A recently published report by FÁS/ESRI on occupational employment forecasts 2012 indicates that the highest
anticipated growth is among the professional and associate professional occupations, plus managers, with the
proportion of new jobs that require third-level qualifications expected to be higher than in recent years. A
much greater proportion of women work in these occupations. Although fewer women than men work,
those that do are, on average, of higher educational attainment. Women are increasing their share of high-skill
occupations rapidly and levels of educational attainment among female workers are anticipated to continue to
rise faster than among male workers. The forecasts for 2012 see this gender difference widening further with
women increasing their share of employment faster in these particular occupations.
Greater choice in school subjects and career options also help to narrow the gap. Women in Science and
Technology, set up by IBEC, promote the take-up of science subjects among girls and to profile women
scientists. Science Foundation Ireland is actively engaged in attracting more women into science, engineering
and technology by proactively working with under-graduates and postgraduate students to foster their
advancement in the sector.
In the legislative area, improved provisions in relation to maternity leave, parental leave, adoptive leave, carer’s
leave, the national minimum wage and part-time employment have made it easier for women to combine
employment and family life. Work supported by the National Framework Committee on work/life balance, in
addition to the introduction of family-friendly arrangements at the level of the enterprise, continues to play its
part.
4.9 Economic Migration and Integration
4.9.1 Economic Migration
Due to the growth in employment in the past number of years, work permits issued to non-EU nationals
increased from 6,000 in 1999 to 47,000 in 2003. Since 1 st May, 2004, the main focus is to maximise the
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potential for EEA nationals to fill areas of skills shortage. Secondly, the focus is to cater for those high level
skills that are strategically crucial to the development of the economy, which cannot be sourced from within
the EEA. Against this background, the Employment Permits Act 2006, together with the Employment Permits
Act 2003, provide the statutory basis for the new schemes set out below. These arrangements put in place a
flexible, responsive and managed economic migration policy. This policy is a key part of the National Skills
Strategy. The four new types of employment permit are:
 Green Card Scheme: This is for occupations where there are strategically important high-level skills
shortages with annual salaries normally above € 60,000.
 Work Permits: These are mainly for non-Green Card occupations in the €30,000 to €60,000 annual
salary range. It will only be granted in exceptional circumstances for occupations with salaries below
€30,000.
 Intra-Company Transfer Permits: These are for trans-national senior management, key personnel
and trainees.
 Spousal/Dependant Permits: This will allow the spouses and dependants of Employment Permit
holders who are entitled to reside here to apply for Work Permits and thereby help support their
families.
The Green Card and Work Permits will now be granted and issued to the employee instead of the employer.
This will strengthen the position of the employee in the employer/employee relationship.
Graduates
At present a significant number of non-EEA students are pursuing courses of study in third level institutions.
Third level students may now apply to the Irish Naturalisation and Immigration Service to remain in Ireland for
six months after they have received their examination results in order to seek employment.
4.9.2 Integration
A Minister of State with specific responsibility for the development of integration policy was appointed in June
2007. The Minister is based in the Department of Community, Rural and Gaeltacht Affairs and has links to the
Department of Justice, Equality and Law Reform and the Department of Education and Science. The Office
will be involved in setting up new funding lines to address integration priorities; developing “principles” of
integration; bringing Departments together to coordinate integration activities and helping all parties (local
communities/local authorities/trade unions/religious groups etc.,) to play their part in building an integrated
Irish society. The establishment of a Task Force on Integration in early 2008 was recently announced. It will
identify key issues affecting immigrant communities; consult widely with immigrants and Irish people; visit
communities; examine previous research and report back with recommendations.
Irish Naturalisation and Immigration Service (INIS)
The remit of INIS, set up in 2005, is structured around a number of key areas – asylum, visa, immigration and
citizenship processing, asylum and immigration policy, repatriation, and reception and integration (the latter
now given a greater focus through the appointment of a Minister of State). Overall responsibility for the
promotion and coordination of integration measures for all legally resident immigrants rests with INIS. The
main approach to integration of migrants involves the adaptation of mainstream policies and services rather
than the provision of separate services for migrant groups, with the creation of institutional arrangements to
achieve the various necessary tasks.
Legislation
A new Immigration, Residence and Protection Bill is expected to be enacted later in 2007, setting out a
legislative framework for the management of inward migration to Ireland and will replace the gamut of current
law in place.
Funding
A €5 million “Immigrant Integration Fund” was established in 2006 to support integration activities among
legally resident immigrants. The Fund has been disbursed through various initiatives including (a) funding for
major integration related projects carried out at regional level by NGOs and (b) at a local level by area-based
partnership companies involved in the social inclusion area.
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Various funding streams have also been established to develop targeted initiatives for vulnerable groups to
promote their access to employment with a particular focus on persons granted leave to remain under the
2005 Irish Born Child Scheme. A scheme of small grants was also developed during 2006/2007 to promote
interaction between newcomers and local communities.
Policy
A number of strategic studies to inform policy development on integration are ongoing. These include studies
on English language training for adult immigrants and interpretation and translation services. A crossDepartmental Group, established in February 2007, to carry out a review of existing integration policy and to
provide an initial assessment of future policy options, has now developed a policy framework document that
will inform developing integration policy. The recommendations from the proposed Task Force will also
inform and drive policy development in the integration area.
Education and Training
Commitments have been made to enhance support for the effective integration of immigrant children at both
primary and second-level education, through the provision of an extra 550 language support teachers by 2009.
The National Council for Curriculum and Assessment has distributed intercultural guidelines to support
teachers and schools in developing a more inclusive learning environment and in providing students with the
knowledge and skills they need to participate in a multicultural world.
FÁS Support for Economic Migrants




The ‘Know Before You Go’ campaign centres around a suite of informational materials designed to
challenge the motivation of migrants for being mobile and at the same time to give useful information
on a range of issues including Job Search, Accommodation, Social Security, Housing, Education, Health
etc.
A telephone interpretation service in all public offices allows for simultaneous translation in all
European languages and is available on demand. The website includes all information on living and
working conditions, employment rights etc. and are available in all European languages.
A proactive European recruitment service is offered to employers, whereby the employer,
accompanied by a Eures Advisor, will do interviews and selection in the sending country with relevant
information provided on living and working in Ireland.
It works closely with the National Qualifications Authority in order to ensure that mobile workers
are placed in jobs that fully reflect their qualifications and experience. It also provides technical
English training as part of this.
Family Reunification
Family reunification varies according to the status of the migrant. All migrant workers are entitled to be joined
by their eligible family members but the timeframe under which unification can take place is based primarily on
the migrant workers’ status and economic position. However, all documented migrant workers are eligible
for family reunion after three years.
Asylum Seekers
The number of persons seeking asylum in Ireland increased dramatically from 362 in 1994 to 11,634 in 2002,
before falling again to 4,323 in 2005. Asylum seekers are not permitted to work, but those whose applications
are successful and become recognised as refugees acquire full employment and social rights. Of those who
claim asylum status, almost 90% are not successful in their claim.
Information, Communication and Cultural Issues
A National Action Plan against Racism 2005-2008 (NAPR), introduced in 2005, is an important general plank in
Ireland’s approach to cultural diversity and integration. The Plan rests on a thorough and well worked out
framework and sets out an ‘intercultural framework’ to combat racism on the one hand and to develop a
more inclusive intercultural society on the other.
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61
Annex 1: North/South Co-operation on the island of Ireland
In 2005 the British and Irish Governments agreed to include a common contribution in their respective
national reform programmes. The two Governments affirmed their commitment to the full implementation of
the Good Friday Agreement and the early restoration of the political institutions of the Agreement, including
the Northern Ireland Executive and the North/South Ministerial Council.
The 2005 common contribution recognised that, while there are important differences, many of the economic
challenges facing the Northern Ireland Executive and the Irish Government are similar. North/South economic
co-operation, on matters when appropriate and of mutual benefit, can play a role in meeting the Lisbon
objectives of delivering long-term sustainable growth, high employment and a fair and inclusive society.
Following an historic agreement by the political parties in March 2007, devolution was restored in Northern
Ireland on 8 May 2007.
In the new context of devolved government in Northern Ireland, the Northern Ireland Executive and the Irish
Government wish to consider the most appropriate vehicle for reporting on how north south cooperation is
contributing to the EU becoming the most competitive and dynamic knowledge based economy in the world,
capable of sustainable economic growth, with more and better jobs and greater social cohesion.
EU Taskforce
Following the visit of President Barroso to Belfast, the European Commission has set up a Task Force on
Northern Ireland.
Investment in Infrastructure
On restoration of devolution, a financial package was provided to the new Northern Ireland Executive to help
create long-term economic and financial stability in Northern Ireland. The financial package focussed on key
drivers of future economic productivity and competitiveness.
To address the challenges of knowledge based global economy, the package included a new innovation fund,
including matched funding from the Irish Government targeted specifically on collaborative research and
development.
To address the infrastructure challenges on the island, a major cross border roads programme was included,
funded by contributions from the British and Irish Governments.
The North/South Ministerial Council, on 17 July 2007 noted the Irish Government’s intention to make
available a contribution of £400m/€580m to help fund major roads programmes providing dual carriageway
standard on routes within Northern Ireland serving the North West Gateway and on the eastern seaboard
corridor from Belfast to Larne. The Northern Ireland Executive confirmed its acceptance, in principle, to
taking forward these two major road projects.
In August 2007, the A1/N1 Newry to Dundalk cross-border road project was completed. This joint
North/South project represents a significant link in the Euro Route E01 linking the major seaports of Larne,
Belfast, Dublin, Dún Laoghaire and Rosslare as well as Dublin and Belfast airports. The scheme is also located
on the Ireland/UK/Benelux section of the Trans European Road Network.
62
Significant progress has been made in the past year towards the creation of a single energy market on the
island of Ireland. The transition to the single market for wholesale electricity trading began on 3 July 2007 and
market testing will lead to active trading of over €2-€3 billion in the new single market from 1 November
2007.
The new market will promote greater competition, bringing economies and efficiencies of scale that will
deliver long term benefits to consumers in both countries.
Further Co-Operation
Following the restoration of the Northern Ireland Executive, the Irish Government looks forward to a further
strengthening of co-operation in range of areas where there are mutual benefits, such as social inclusion.
63
Annex 2: Implementation of the Strategy for Science,
Technology and Innovation
Continued increased investment in higher education R&D, noted above, has resulted in significant strides being
made in the development of Ireland’s third level academic base under the current National Development Plan.
The Programme for Research in Third Level Institutions (€830m expenditure to date) and the initiatives of
Science Foundation Ireland (€825m expenditure to date), in particular, have changed the scale and quality of
research undertaken in Ireland and the infrastructure supporting it.
This work will continue and intensify over the coming years because investment in human capital development
is viewed as pivotal to the success and sustainability of Ireland’s national innovation system. This next phase is
addressing a number of priorities, including:
 Research capacity, quality and output
 Investment in fourth level and the public research system
 Reform in the universities
 Better management of the research and innovation environments to ensure effective transfer of
knowledge and technology.
Two overarching goals are being pursued:
1.
2.
To build up a sustainable system of world class research teams across all disciplines, but particularly in
biotechnology and information and communication technology, in terms of people and supporting
infrastructures,
To double the number of PhDs by 2013.
These goals are interlinked since the quality of both research and postgraduate formation is dependent on
access to world-class principal investigators to lead teams of postdoctoral and postgraduate researchers.
To achieve these,
- Since its establishment in 2001, SFI has approved over 1,600 awards across all its programmes,
representing a substantial investment commitment of over €825 million as it continues to build a high
quality research environment in Ireland. In 2006 alone, SFI attracted 28 world class researchers to
Ireland from overseas through a variety of programmes, and continues this trend in 2007 with a
significant number of new grant approvals to researchers previously based abroad.
- Further investments in research infrastructure will be made across the country to build on progress
under the current NDP. The PRTLI continues to make significant investment in infrastructure. A
further €230 million research investment was announced in 2007 under the fourth cycle of the PRTLI.
The SSTI will address the remaining shortfall and provide for new infrastructure. The activity under
the SSTI is complemented by the announcement in the 2006 Budget of €900m for a 5-year capital
programme and a further €300m Strategic Innovation Fund (SIF). The Strategic Innovation fund was
introduced in 2006 and €130 million is to be allocated under the second call. Through an
internationally peer-reviewed competitive tender, the SIF will support universities in increasing their
capacity to produce high quality 3rd and 4th level outputs. It is be based on national priorities and
individual institutional strengths as well as inter-institutional collaborations will be encouraged.
- Research activity by more world-class well-structured research teams will be supported by the
establishment of graduate schools which will ensure the more effective development of our
researchers (e.g. with greater transferable professional skills training), shorter PhD duration and
improved completion rates.
- Sustainable career development for researchers is being tackled under the auspices of a special task
force of the Advisory Science Council which is due to report in 2007.
- In addition to domestic activity, obstacles to the attraction of international of researchers are being
addressed, e.g. through the Irish Researcher Mobility Centre, fast-track work permit arrangements
for research and through the implementation of the Third Country Researchers Directive.
- The governing bodies of several institutions have been undergoing several modifications, including the
appointment of external chairpersons and greater representation of non-academic stakeholders. In
addition, enhanced policies for both external and internal quality assurance procedures are being
implemented across the universities.
64
SSTI Indicators
 Number of new doctorates in science, engineering and technology earned annually to nearly double
from 543 in 2005 to 997 in 2013.
 Number of new doctorates in humanities and social sciences to increase from 187 in 2005 to 315
annually by 2013.
 Ireland will significantly increase its performance in the publications league table (currently ranked
12th).
 Ireland will aim to significantly enhance its performance on the citations index.
Research Commercialisation
Realising the commercial potential of Irish-based R&D is a major priority for the SSTI. Enterpise Ireland has a
key role in achieving this objective. Its aim is to accelerate the commercialisation of research by stimulating and
facilitating interaction between industry and the research infrastructure. Key actions in this regard included
helping companies and researchers to bring new technologies to market, involving industry in leading the
research agenda, strengthening the technology transfer function in universities and building applied research
strengths in the institutes of technology.
The Enterprise Ireland Commercialisation Fund is designed to bring new technologies to the market place by
encouraging and facilitating high quality applied research aimed at the commercial exploitation of knowledge.
The three phases of the fund – proof of concept, technology development and business development – mirror
the steps required to take scientific principles and ideas into the commercial environment. In 2006, the fund
supported 155 research projects through the proof of concept and technology development phases to the
value of €29.7 million, funding supported projects in many areas e.g. biotechnology, informatics and industrial
technologies.
Increasing the transfer of intellectual property and R&D from higher education institutions to industry is a key
element of Enterprise Ireland’s strategy. In May 2006, Minister for Enterprise, Trade and Employment, Mr.
Micheál Martin TD announced the provision of a €30 million fund designed to build stronger and more
professional technology transfer functions within higher education institutions in Ireland. This funding will
ensure better economic returns from R&D investment, through the development of improved systems,
procedures and expertise in technology transfer offices.
A National Code of Practice for managing intellectual property from publicly funded research was launched in
April 2004. This was followed in November 2005 with a Code of Practice for Managing and Commercialising
IP from Public-Private Collaborative Research. Together these Codes provide a comprehensive set of
guidelines for IP management and commercialisation and a framework for IP negotiations to facilitate the
development of enterprise-academic relations.
Enterprise Ireland also developed technology incubators as complements to public investment in scientific
research in Ireland. These provide vital transitional spaces between the research and business worlds and
create environments where the commercial potential of third-level R&D can be maximised. The incubators in
third-level institutions throughout Ireland generate seedbeds of innovative knowledge with the potential to
create start-ups that can grow rapidly. To date Enterprise Ireland has approved 19 centres in 15 Institutes of
Technology or equivalent third level colleges and in three Universities. EI has also supported 6 specialist Bioincubation facilities on university campuses. Total investment in campus business incubation activity is over
€46.7 million.
SSTI Indicators
Within the context of the funding being provided to the third-level sector to strengthen research
commercialisation, each research performing institution is being asked to set targets in the following areas:
 Financial and human resources devoted to technology transfer, IP management and other
commercialisation activities,
 Number of invention disclosures reported,
 Number of patents applied for and granted,
 Number of patents generating revenue,
 Number of licence agreements with companies,
 Total revenues from licensing and fees from royalties,
 Number of actively trading spin-off firms established and their survival rates,
65
 Private sector investments in public research spin-offs,
 Number and size of industry-commissioned projects.
Enterprise R&D
Manufacturing and international services will continue to be fundamental to Irish economic growth. Future
opportunities primarily lie in the development of knowledge-intensive industry, both in terms of indigenous
activity and in those element(s) of foreign direct investment that Ireland seeks to attract and embed. It also
means greater use of technology in all sectors to improve productivity and competitiveness.
Business expenditure on R&D, as noted above, is increasing in absolute terms but relative to economic growth
levels and international comparators remains weaker than desirable. There is therefore a strong push in the
SSTI to engage a larger number of companies ‘more’ in R&D activity in Ireland. The key elements of this new
approach are:
 Raising awareness and increasing the number of companies carrying out R&D,
 Improving soft support systems to secure the development of appropriate technology strategies by
companies,
 Achieving step changes in quality and quantity of R&D activity in existing R&D performers,
 Building in-company technology capability,
 Increasing inter-company and industry-HEI collaboration,
 Simplifying the administrative and operational procedures of R&D programmes.
Technology Ireland, one of the SSTI’s implementation groups, (see “Policy Oversight and Review” below)
undertook significant work with its member agencies in 2006 in rationalising and simplifying their R&D scheme
offerings to firms. The newly designed schemes have now been submitted by the Department of Enterprise,
Trade and Employment to the EU Commission as part of the notification process of the schemes for State Aid
approval. It is planned that the simplified schemes will be rolled out to client companies from the start of 2008.
The tax credit for R&D introduced in 2004 is another important element of the portfolio of public support for
enterprise R&D. The scheme (which is incremental and operates on a rolling baseline starting from 2003) is
being monitored to ensure that it is supporting the SSTI targets as effectively as possible.
The SSTI established targets that aim to double to 1,050 the Number of Firms Engaged in Meaningful R&D by
2013 (i.e. in excess of €100,000) and treble to 100 the number of companies engaging in significant R&D (€2
million spend per annum) In this context, EI set interim targets to 2007 as part of its Strategic Plan for the
period 2005-2007 – increase to 596 the number of firms enaged in meaningful R&D by 2007 and increase to
42 the number of firms enaged in significant R&D by 2007. As of 2006, 601 companies were spending over
€100,000 in R&D and 40 invested over €2 million.
Consideration is currently being given to the improvement of the financial supports available for in-company
R&D in order to deliver a more holistic and systematic offering to client companies. The tax credit for R&D
introduced in 2004 is another important element of the portfolio of public support for enterprise R&D. The
scheme (which is incremental and operates on a rolling baseline starting from 2003) is being monitored to
ensure that it is supporting the SSTI targets as effectively as possible.
This work is complemented by activity within the enterprise development agencies to enhance the ‘soft
supports’ available to firms. For example, Enterprise Ireland has put in place an R&D Advocates programme:
people with appropriate expertise and experience to contact and engage with firms who have not previously
undertaken R&D. As a result of the programme to date around 35 client companies are seeking further
support for R&D projects. The IDA is running a new international promotional and marketing programme
aimed at MNCs with operations in Ireland and those in target markets overseas.
Also on the international front, technology transfer from foreign sources will be enhanced through the
“TechSearch” initiative and linkages between MNCs and SMEs in Ireland. In 2006, the “TechSearch” initative
assisted 160 clients resulting in 35 licence agreements representing an investment of over €2 million.
Industry-academia linkages are another critical part of the agenda for Technology Ireland. Initiatives such as
Innovation Partnerships run by Enterprise Ireland over the course of the current NDP are being added to with
66
fresh efforts to increase the levels of collaborative activity in Ireland (between firms and third level institutions
and also between firms themselves). These include industry-led networks in which companies engage with
each to agree a shared strategic research agenda and then to select a research group(s) with whom to
collaborate. The most recent examples of these are in the areas of functional foods and e-learning.
In 2006, for example, Enterprise Ireland continued to facilitate collaboration between industry groups and
academic research teams. The objective was to allow Irish companies in a specific sector to specify and lead
research projects that will have commercial benefit and increase international competitiveness. As a result
Enterprise Ireland approved two industry-led programmes which will lead to significant R&D projects. In the
first of these Enterprise Ireland, in collaboration with the Irish BioIndustry Association, launched a €2 million
BioIndustry-Led Research Programme. In partnership with an industry group from the Wireless-Mobile
Telecoms sector in Ireland and research groups in third-level institutions, Enterprise Ireland approved an
industry-led research programme in building mobile IMS service creation tools and novel services.
Competence Centres
Further structured engagement between industry and academia will be supported through the establishment of
Competence Centres. Competence Centres are collaborative entities established and led by industry that are
resourced by highly-qualified researchers associated with research institutions who are empowered to
undertake market focussed strategic R&D for the benefit of industry
The Competence Centres Programme is co-ordinated by Enterprise Ireland as part of the response to the
Government Strategy for Science, Technology and Innovation 2006 - 2013. It is a joint IDA/EI programme also
involves DETE, Forfas, and SFI through the Technology Ireland Forum. The Programme was launched in
March 2007 with a call to groups of companies in Ireland to complete an Expression of Interest with a deadline
of May 2007. All groups expressing interest were interviewed in July 2007 to select the groups with the
highest priority for further development of their proposals. A series of joint Agency meetings are being
undertaken to evaluate and prioritise the groups submitting expressions of interest that show highest potential
impact will be selected to progress
Institutes of Technology - Applied Research Enhancement Scheme
Institutes of technology are important to balanced regional development. Enterprise Ireland supports the
establishment of centres of excellence in applied research and assists the institutes of technology to compete
successfully for national and international research funding. In 2006, the Applied Research Enhancement (ARE)
programme was introduced on a national, non-competitive basis providing opportunities for the Institutes to
develop research capability in areas of strategic importance to the individual colleges and which are of
relevance to industry in the particular region. To date, eight centres have been funded with investment of €10
million.
Innovation Voucher Initiative
The objective of the Innovation Voucher initiative is to build links between Ireland’s public knowledge
providers and small businesses and to create a cultural shift in the small business community’s approach to
innovation. Voucher recipients can join with other small businesses also in receipt of an Innovation Voucher
to work with a knowledge provider in solving an issue of common concern, up to a maximum number of ten
companies. Recently, the Minister of State for Innovation Policy, Michael Ahern TD visited Waterford
(Wednesday 1st August 2007) to kick-off the first planning meeting between Dr. William Donnelly, Head of
Research and Innovation Waterford IT and Pat Jones, MD of E-management Systems Ltd who have joined
forces to spend one of Enterprise Ireland's first Innovation Vouchers. The €5,000 voucher was issued through
the Innovation Voucher Initiative by Enterprise Ireland to help Mr Jones engage with Waterford IT and deliver
a solution to some of his company's technology obstacles
There were 194 vouchers allocated in the first phase of this initiative which is designed to assist small Irish
firms become more innovative. The agreement between Waterford IT and E-management Systems Ltd is one
of the first projects out of the starting blocks. The next phase of Innovation Voucher initiative opens on 1st
October 2007.
SSTI Indicators
 Business investment in R&D to increase to €2.5bn by 2013.
 No. of indigenous companies with meaningful R&D (> €100,000) to increase to 1,050.
 No. of indigenous companies with significant R&D (> €2m) to increase to 100.
67
 No. of foreign affiliate companies with minimum scale R&D up to 520.
 No. of foreign affiliate companies with significant R&D to grow to 150
Science, Education and Society
Ireland will make a number of important changes to science education at primary and secondary level in order
to increase and improve their outputs and throughput to higher levels.
Science has recently been re-introduced into the primary curriculum and corresponding training for teachers is
undergoing enhancement, both in the Colleges of Education and via in-service training. At secondary level, a
revised syllabus was introduced to the junior certificate in 2003 with a greater emphasis on investigative work.
While approximately 90% of students take science in this cycle, this falls to 60% in the leaving certificate and
work is required to address this falloff. This will be tackled by:
 Reform of the Leaving Certificate science curricula to ensure a continuum from the Junior Certificate
and to increase the emphasis on project/ hands-on activity,
 Increased investment in teacher professional development and consideration of technical assistance,
 Improved information and awareness activities.
The latter is supported by the Government’s integrated awareness programme Discover Science and
Engineering (DSE) whose budget has tripled from 2004, its first full year of operation to €5M in 2007 . DSE
continues to support curriculum change at primary level and is now also supporting the changes outlined
above at Junior Certificate level. It is implementing further support initiatives, including one for transition year
while continuing to develop support material in the area of career choice. Continuing the pipeline, more
students who study science at secondary level will be encouraged to continue their science focus in third level
and beyond.
Sectoral Research
Significant areas of sectoral research right across the various realms of Government activity hold strong
potential to deliver socio-economic progress for Ireland. These include:
- Agriculture and food: RTDI has a key role to play in the sustainable development of the sector and
research funding provided is being focused even more on identified sectoral needs and its future
competitiveness. Stronger links with other relevant research activity will be promoted, e.g. on agrienvironment issues.
- Health: Strong research competence is essential to the future delivery in Ireland of world-class
healthcare and the recruitment of top professionals. In 2006, the Advisory Science Council published
a review of key policy requirements in the sector (Towards Better Health: Achieving a Step Change in
Health Research in Ireland) and recommended, inter alia, the establishment of a number of translational
research centres, with a view to strengthening health research and policy research capacity and
addressing strategic national priorities.
- Environment: Research in Ireland is primarily focused on eco-innovation and environmental
technologies that deliver potential solutions to our most pressing environmental challenges. The
Environmental Technologies Action Plan (ETAP), and the Science, Technology, Research, and
Innovation for the Environment (STRIVE) Programme - operated by the Environmental Protection
Agency (EPA) on behalf of the Department of the Environment, Heritage and Local Government - are
the primary channels of this research.[
- Marine: The Marine Institute’s strategy for the period to 2013 aims to deliver an integrated research
and innovation programme that prioritises (i) activity within existing industry, (ii) the development of
new research capability and (iii) policy support research.
- Energy: The energy sector is characterised by high dependency on imported fuels and international
environmental obligations. Work on the articulation of national energy policy is underway and
thematic areas will include Smart Grids, the rational use of energy, wind energy, marine energy and
biomass for heat and fuel. The dependence of enterprise and the economy on cost-effective energy
supply is increasingly being viewed as a national priority. The new Programme for Government
includes a commitment to include a third research pillar in the area of sustainable energy and energy
efficiency technologies within the remit of Science Foundation Ireland.
All-island and Internationalisation
68
Ireland’s research efforts have benefited greatly from transnational collaboration through the promotion of
scientific excellence, access to state-of-the-art facilities and enhanced researcher mobility and networking.
Continued involvement in international activities will be pursued in a co-ordinated and strategic fashion over
the next period. The Advisory Science Council is currently undertaking work to develop an
internationalisation strategy for Ireland in respect of science, technology and innovation. It is expected that this
work will help public funding bodies and the private sector to adopt a more strategic approach to international
linkages in terms of priority countries and technologies that should become the focus of activity going forward.
The Advisory Science Council will provide its recommendations by early 2008.
Particular attention is being given to our participation in the EU’s Seventh Framework Programme and new
support structures have been put in place to ensure maximum readiness and return from our participation in
the programme. The new post of National Director for FP7 was created in late 2006. The National Director
leads the overall national engagement in the programme and ensures that a coordinated approach is adopted
across all government departments and agencies. As well as engagement in other European activities such as
the European Space Agency and various inter-governmental research organisations, we will examine the
potential for co-operation with economies in Asia and continue to develop our links with the US.
All-island collaboration is a horizontal objective of the Strategy and, where appropriate, related initiatives will
be undertaken, as is happening in a number of instances across the sectoral areas.
SSTI Indicators
 Share of HERD funded from foreign sources to increase to 20% by 2013 (10% in 2004).
 Return from EU Seventh Framework Programme to all participants to reach €400m by 2013 (This
target is under review).
Policy Oversight and Review
The Inter-Departmental Committee (IDC) for STI, reporting to the Cabinet Sub-Committee, has overall
responsibility for the implementation of the Strategy for which there is a total budget of €8.2bn over the
period to 2013. Its key role is in assessing progress against indicators as set out above.
In addition to the inputs of the Advisory Science Council and the Chief Scientific Advisor, the IDC is
supported by three implementation groups composed of representatives from the relevant Departments and
related agencies. The Higher Education Research Group has responsibility for ensuring coherence among key
funding initiatives such as PRTLI and the funding awards schemes of the relevant agencies and councils.
Technology Irelandis responsible for enterprise R&D activity. A Health Research Group has similarly been
established to advise on the formulation and implementation of a comprehensive health research strategy. The
IDC and implementation groups are backed up by a Joint Secretariat comprised of representatives from the
relevant Departments and Agencies.
69
Annex 3: Transport 21 Developments
(January to August 2007)
Public Transport









new Docklands railway station opened in March
construction work started on the upgrading of the Dublin Kildare railway line
construction work started on Cherrywood Luas extension in June
work started on first phase of Western Rail Corridor from Ennis to Athenry in June
preferred route for Metro West was announced in July
first of the 183 new railcars for use on intercity rail services were delivered
enabling works started on the Glouthane to Midleton railway line
first of the extended trams on Luas Red line entered service in May
100 additional buses are being phased into service by Dublin Bus and will all be in service by end of
year.
National Roads
 N18 Ennis Bypass opened in January
 N6 Tyrrellspass to Kilbeggan project opened in May, six months ahead of schedule
 N52 Mullingar to Belvedere opened in May, one month ahead of schedule
 Work has started on Cable-Stayed Bridge on N25 Waterford City Bypass
 First phase of the Arklow to Gorey bypass opened on in July.
Regional Airports
Approval was given in February for capital grants amounting to €86 million for the country’s six regional
airports:
Airport
Funding (€ Million)
Ireland West Airport Knock
Kerry Airport
Waterford South East Regional Airport
Donegal
Sligo
Galway
€ 27 m
€ 17.7 m
€ 22.3 m
€ 3.8 m
€ 8.5 m
€ 6.3 m
The funding will be used principally for terminal and runway extensions and to enhance safety and security.
70
Annex 4: National Indicators for European Employment
Strategy
The idea of measuring and comparing performance is central to the European Employment Strategy. The
majority of these comparisons are based on statistics supplied by the National Statistics bureau (in Ireland the
CSO) and verified by Eurostat, thus giving cross-country comparability. In the case of certain data
requirements indicators are not available on a harmonised basis and must be developed based on National
Sources. As these indicators cannot offer the degree of cross-country comparability that agreed Eurostat data
does, it has been agreed to focus on the trend within Member States as opposed to conducting a ranking
exercise. Outlined below are indicators for monitoring Employment Guideline 19 as agreed by the
Employment Committee (EMCO). The data is compiled by the Department of Enterprise, Trade and
Employment and is based on National Sources and the Eurostat Labour Market Policy Database. Due to
methodological differences this data may not be comparable between all Member States.
Indicator
Code
19.2
19.3
19.4
Definition
Share of young/adult unemployed becoming
unemployed in month X, still unemployed
in month X+6/12, and not having benefited
from intensive counselling and job search
assistance (Category 1). Data based on
yearly averages.
Share of young/adult unemployed becoming
unemployed in month X, still unemployed
in month X+6/12, and not having been
offered a new start in the form of training,
retraining, work experience, a job or other
employability measure (Category 2-7). Data
based on yearly averages.
Number of long-term registered unemployed
participants in an active measure (training,
retraining, work experience or other
employability measure) in relation to the sum
of the long-term unemployed participants
plus registered long-term unemployed (based
on yearly averages).
U-25's
Male
U-25's
Fem.
Adults
Male
Adults
Fem.
1.1%
1.1%
0.9%
0.9%
2.8%
2.8%
2.7%
2.5%
Male
Female
Total
18.4%
23.4%
20%
71
Annex 5: Expenditure on Employment and Training
Supports
The following table shows expenditure for employment and training supports provided by FÁS, Skillnets and
the Departments of Education and Science and Social and Family Affairs in 2005, 2006 and 2007.
€000's
€000's
€000’s
2005
101,800
20,633
19,359
2,689
37,985
26,103
1,070
21,863
38,904
2,684
44,889
2006
113,034
22,699
38,777
2,013
37,586
26,326
1,163
20,561
42,435
2,753
49,371
2007
130,366
26,461
40,488
2,267
41,573
30,114
3,000
18,557
47,363
3,160
52,600
295,820
37,549
30,311
5,319
4,882
6,578
€698,438
325,597
37,940
NA
5,552
6,694
7,682
€740,183
356,000
40,398
NA
5,750
10,500
8,500
€817,097
Skillnets
€7,500
€14,000
€23,500
Department of Social and Family Affairs
Back to Work Allowance
Part-time job incentive scheme
Back to Education Allowance
Assistance to Back to Work participants
Grants for small projects to assist return to work
Activation and Family Support Programme
Family Income Supplement
TOTAL
53,563
1,295
46,695
1,795
2,823
2,410
72,152
€180,733
56,486
1,277
52,070
2,198
3,133
2,190
107,137
€224,491
73,210
1,300
68,510
2,200
3,100
2,500
152,450
303,270
Department of Education and Science
Youthreach
VTOS
TOTAL
44,964
57,828
45,334
61,942
68,000
56,981
€106,964
125,828
€102,315
FÁS
Training
Apprenticeship
Traineeship
Training & Sectoral Initiatives and Sponsored Training
Evening Courses / FÁS eCollege
Specific Skills Training
Local Training Initiatives
Workplace Basic Education Scheme
Bridging Foundation
Foundation/Progression in CTCs
Return to Work
Specialist Training Providers
Employment
Community Employment
Job Initiative
Social Economy
Job Clubs
Wage Subsidy Scheme
Supported Employment Programme
TOTAL
72