Monthly Archives: October 2011

Unemployed workers fund in a shambles

Podcast: €55m of support from Brussels for unemployed construction workers will in all likelihood go unspent.  A civil servant tells me that efforts to remedy the situation have been “disregarded”

“Lamentable”, and “Not moved on since the 1980’s” were two descriptions I was offered recently by two different people about the services FAS offers to the newly unemployed. Both of those people worked for FAS.

That is why the money from the European Globalisation Fund is potentially so important. Each year a half a billion Euro is put into a pot in Brussels marked EGF.  Member states can apply to it for supports for those who have been made redundant as a consequence of jobs moving elsewhere in our globalised economy.

We have dipped our hands into the pot more than every other country in the EU bar one. So you would think that we would have gotten pretty efficient about how to spend it …. wouldn’t you? Not really.

We will be sending back about €10m earmarked for the Dell workers in Limerick as unspent even though only a couple of hundred have found employment. And now it is looking very much like €55m which should have been devoted to up-skilling and re-training unemployed builders and labourers will go almost entirely unspent.

The application to the EGF was made on behalf of 9000 workers whose redundancy sheets had landed in the Department of Trade, Enterprise and Employment in 2009. Under the rules of the EGF the money can only be spent on the people whose names are in the application but the Department never told them they were applying on their behalf.

The department still haven’t told them and will only write to them next week, a full year and half later. Eighteen months is more than long enough to slide from recently redundant to long term unemployed to permanently unemployable.

In the course of digging around on this I had a pretty grim conversation with an official in the Department of Education (it’s training, so it’s their baby).  Pat Hayden, who is a principal officer and has evidently been frustrated with the administration of the EGF for some time, told me that “Repeated efforts to have these deficiencies rectified have been disregarded.” Ouch!

Civil Servants don’t criticise governments in public. And while Fianna Fail should be stung by Mr Hayden’s comments they don’t reflect too well on the Lab/FG coalition either. Minister Ciaran Cannon says in the podcast of our Drivetime broadcast that they inherited a mess. They have been in power eight months now. Sinn Fein’s terrier like Pearse Doherty doesn’t look like he’s letting go of this issue as you’ll hear

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Mary Davis – What did she do during the boom?

Podcast: Presidential candidate Mary Davis says her qualifications for sitting on the board of ICS Building Society were that she had “lived my life”

None of this would matter a whit were it not for the whole “we are where we are” predicament we find ourselves in. The boards of every financial institution in the country used to be fleshed out with people with varied life experience but who wouldn’t be able to tell the profit from the loss side of a balance sheet. With her Master’s Degree in Physical Education Davis wouldn’t have been unlike some other Bank directors of the boom years.

ICS were one of the earliest lenders to offer controversial 100% mortgages to first time buyers. Very significant numbers of those people are in big trouble now. ICS also lent, it appears to me, without regard for where the money was coming from and what it was costing the Building Society. We’re all picking up the tab for that one now.

I went back through seven years of ICS annual reports (all so you don’t have to)which cover the period that Mary Davis sat on the Board of Directors. I had quite a few things that I thought it would be interesting to hear her take on now. But we really only dealt with about three issues before the minders closed in and she walked off. One of the voices just about audible off mic is that of former TD Mildred Fox intervening.

Kathy Sheridan’s piece in the Irish Times the following morning suggested that Davis was crying after the interview. If she was, it is not something I take any pleasure in but the subsequent denunciations of me by her campaign team were totally OTT. Just for the record, I didn’t just turn up and ambush her. I spent three days negotiating terms with her Press Officer and had given her advance notice of the areas to be covered in the interview.See more

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Sean Gallagher – honouring old debts

 Podcast: Presidential candidate Sean Gallagher says it was “legal and financial advice” which led him to turn his back on repaying the state investment in his company.

I spent a day sifting through Companies Office records for Sean Gallagher’s companies. I then set those alongside interviews he has given about his businesses. What emerges is a picture of Gallagher taking €20,000 from the taxpayer to set up “Home Wiring Systems”. Then he changed the name of the business to “Smart Homes”, transferred all of the assets to the new company but none of the debts.

Two years later the Enterprise Board came looking for its money back which was followed by three years of legal dispute before Gallagher payed back “almost all” of the investment. He says he “has no regrets” about the return he offered the state on its investment and did what he did because that was what he was advised to do.

The difficulty is that at the time the Enterpise Board was looking for €20,000 back that Gallagher acknowledges was very important in the embryonic stage of the business he had €650,000 in the bank.

My interview (Drivetime, RTÉ Radio 1) with him took a few days to secure, but in fairness it has to be acknowledged that there was no attempt to duck out of it. He had prepared meticulously, referring regularly to three hand written pages of notes and stuck to his guns while we were recording. Afterwards though he acknowledged there was a moral dimension to the episode which he maybe …. might … perhaps … with the benefit of hindsight … have dealt with differently. And it does seem like an awful lot of effort to save a yourself a couple of grand.See more

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