Udaras na Gaeltachta consider challenges of creating new jobs

Meeting for the first time this morning (Friday), members of the new board of Udaras na Gaeltachta face the challenging tasks of analysing the organisation’s performance and brainstorming on ways to accomplish the goals for which the Irish-language body was established.

One priority is employment in Gaeltacht areas. “Job creation and language promotion go hand-in-hand,” Anna Ni Ghallchoir, 55, the new chairperson, told the Donegal News. “With my new board colleagues, I will be examining very closely if past strategies have been successful and come up with innovative ones to help us move forward.”

Depending on whom you speak to, Udaras has either an acceptable record on job creation, or a very poor one, reflecting the age-old comment that statistics are like sausages – they look good but you’re never quite sure what’s in them.

New jobs versus lost jobs

With total funding of around one billion euro so far, Udaras reported it had created 6,970 jobs as of last year in what it terms ‘client companies,’ defined as any company receiving support. When examined in the context of unemployment in Gaeltacht regions, this represents 7.75 per cent of the population there. As of last year, Udaras’ website shows it supported 1,876 jobs in the Donegal Gaeltacht, which represents 7.89 per cent of almost 24,000 people. Donegal Gaeltacht has the second largest number of Irish speakers, but ranks fifth in jobs created among the seven Gaeltacht regions.

Liam O‘Cuinneagain, Udaras chairperson for the last ten years, told the Donegal News he is “satisfied with our job creation performance,” adding, “It’s not easy to get companies to locate to rural Ireland, in part because of its remoteness and lack of transport links and limited skill-sets there.” As evidence in Donegal, he points to sectors Udaras has invested in – seafood processing, call centres (VHI), IT, sea angling, boat repair, even potato-crisp/fast food manufacturing (Largo Foods).

Other business analysts, however, are less satisfied with Udaras’ performance, including Tom Fitzgerald, fluent Irish speaker and business owner employing 50 people at Bard na nGleann, his information-management company in Béal Átha’n Ghaorthaidh in the Cork Gaeltacht. “A strong, well-run economic development organisation is important for the preservation and promotion of the Irish-language and for job creation in marginalized areas such as the Gaeltachts, including Donegal, but there’s no shying away from facts, Udaras is an extraordinarily expensive organisation,” Fitzgerald, whose company has an annual turnover of between one and two million euro, told the Donegal News. “There is little evidence of effectiveness in the statistics. By normal business practice standards, Udaras’ record so far is very poor.”

Expenditure

Fitzgerald points to the fact that the total number of jobs Údarás says it created was lower in 2010 than in 1996. “Furthermore, there’s no indication that the amount of money spent by Údarás in a single year has any impact on job creation in the Gaeltacht.  For example: Údarás spent more than 84 million euro in 2002 according to its own annual report. Yet there is no corresponding spike in jobs either in that year or following years.”

O‘Cuinneagain says during his tenure as chairperson, “cost per job was around eight thousand euro.” However, a simple look at Udaras’s total expenditure for the last ten years (613.5 million euro) relative to the number of jobs it reports creating by the end of last year (6,970) equates to 88,000 euro cost per job. As only around 10 per cent of budget goes to language-cultural activities, the final cost per job figure may be as much as ten times higher than stated. In Donegal, a case study in job costs is Largo Foods, headquartered in Ashbourne, Meath, but with facilities in the Gaoth Dobhair Industrial Estate. According to Udaras, it has received over 6.2 million euro in funding between 1999 and 2011 – with another half-million euro to be paid soon for automated equipment. Udaras said last year the company employed 120 people. Taking those figures, that works out to be over 55,000 euro investment per job created, not considering funding from other bodies for Largo. Ironically, following the installation of the automated equipment earlier this year, media reported 36 jobs were lost at Largo.

As some of Udaras’s ‘client companies’ are also the ‘client companies’ of other organisations, foreign and domestic, from whom they receive additional support, it is difficult to evaluate what specific job numbers Udaras contributions amount to. “The term ‘client companies’ is a loose one, easily manipulated to suit purpose,” said Fitzgerald. “Some organisations that partly support companies in the Gaeltachts often claim all the jobs as their own making, which is quite misleading.”

O’Cuinneagain acknowledges that criticisms of Udaras for not supporting enough micro companies – entrepreneurs wishing to hire a handful of people – are valid. “We’re not getting what we should be getting – smaller businesses,” he said. “We’ve focused too much trying to get big companies that might employ hundreds. Even though the finance and support system is there, Udaras has not been welcoming enough. Staff have not been as pro-active as they should be, have not scoured their Gaeltacht communities to find such entrepreneurs. Unfortunately, we have remained in a culture of factory jobs.”

Asked why, the director of Oideas Gael, a language group in Glencolmcille, lay the blame on factors outside Udaras ranging from lack of business teaching in education “Greek and Latin instead of entrepreneurialism” to lack of bank finance. But he did not rule out the possibility that as funding a small company with thousands of euro amounted to nearly as much paperwork for Udaras staff as funding large companies with millions of euro, there may have be a Udaras propensity for avoiding small business applications. Asked if the push for larger companies could have been simply a strategy to keep employment figures up and for Udaras to retain its all-important job-creation remit, which accounts for most of its annual budget, he said, “That’s ridiculous, sounds more like a conspiracy theory to me.”

Fitzgerald’s opinion differs, “About the only goal that Údarás is measured on is the creation of 800 or so new jobs per year, so they focus on doing just that. The problem is that this strategy doesn’t take into account what kind of jobs they are. In theory, Údarás is better off creating jobs that disappear quickly so they can place the same people again in a year or two.”

Analysts also say the Udaras board members may not have had enough business experience to spearhead a successful jobs-creation strategy. Of the Donegal members on the previous board, none could be identified as having long-time corporate management experience. O’Cuinneagain waved aside concerns that the previous national board was too large, numbering twenty, which some analysts said made it unwieldy to manage and hampered decision-making. “I did not find our board meetings too difficult to manage, but then again my experience as a teacher in inner city Dublin for many years helped a lot,” he said.

Lack of fiscal clarity within Udaras concerns some observers.

“I spent several years studying the organisation and found its finances extremely difficult to understand,” one leading business researcher told the Donegal News. “I also found frequent errors in its calculations. Some figures on spending simply did not add up. There’s really no excuse for that when we have so many accounting software programs such as Excel at our disposal.”

When the Donegal News requested a breakdown of Udaras spending for the seven Gaeltacht regions, particularly Donegal, for the last three years, Siubhán Nic Grianna, national communications and marketing manager, responded, “The distribution of total monies is not segregated on a county by county or Gaeltacht by Gaeltacht basis therefore I cannot provide breakdown for Donegal for this period.”

Bernard Allen, former TD and head of the multi-party Public Accounts Committee (PAC), which oversees the proper spending of public money, told the Donegal News that lack of transparency at Udaras may have hindered job-creation efforts. “We found its expenses system to be incomprehensible and could not understand how it was spending so much money on trips for so-called job creation efforts.”  Referring to the scandal over misspending by another state body, he added, “Udaras’ expenses read like a mini-FAS and it seemed to stymy our efforts to find out the truth and avoid disclosing pertinent facts and figures to us, especially related to board member, staff and associated expenses. With better accounting practices, perhaps its job creation efforts could have been more effective. ”

Some questions concerning expenses, including 30,000 euro over two years on trips to Halifax, Canada, to look at seaweed projects, costly business-class flights, trips to many international cities including Las Vegas, Shanghai, Los Angeles and Chicago, and expenses for spouses – which is counter to existing regulations – have still not been fully answered, Allen said.

Nic Grianna said such concerns lack basis. Describing the first story in this newspaper series as, “a slanted view, full of insinuations,” she added, “There was no reprimand from the Public Accounts Committee (PAC). We are very open and transparent and explained everything. There has been no abuse of public money.” In response, Allen said simply, “We did not get all our questions answered satisfactorily and a national election was called and the PAC disbanded before we could investigate fully.” Even though the information is in the public domain, Nic Grianna declined a request for a breakdown of pensions for 136 Udaras former executives costing around 4.3 million euro this year, half of this year’s current budget. Efforts to contact retired executives Cathal MacSuibhne in Donegal and CEO Padraig O’hAolain through Udaras for comment, were unsuccessful.

With allegations of cronyism and clintelism tainting many public bodies, O’Cuinneagain said he did not experience conflicts of interest while Udaras chairperson. “My organisation, Oideas Gael, did not receive any money from Udaras so I certainly did not feel the need to excuse myself from board discussions on funding, nor did any of the other board members as they did not receive any money either.”

As the Udaras board meeting gets underway this morning, Sean O’Cuirean, a new member from Falcarragh, remains optimistic. “A good thing about this board is that there are a new set of eyes looking at the situation. Such fresh perspectives often result in greater success and money well spent.”

Published in Donegal News

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New start for Udaras na Gaeltachta

With its national board due to meet for the first time as early as next week and its all-important job-creation remit still intact, a new start seems in order for Udaras na Gaeltachta.

But controversy still bedevils the beleaguered organization with criticisms of misspending of public money and investigations into alleged petty corruption by former board members in Donegal hanging over its head.

Over the next few weeks, the Donegal News analyses the Irish-language organisation, with emphasis on its operations here, in an effort to understand whether it has accomplished its tasks with adequate self-governance or whether various criticisms it faces are justified. And what, if anything, can be learned from the findings.

On a positive note, Anna Ni Ghallchoir, from Arranmore, the newly-appointed national chairperson of Udaras, told the Donegal News, “We have a very committed team with varied experience on the board now and I have every confidence their combined efforts will lead to success.”

Udaras

Sean O’Cuirean, Falcarragh solicitor, manager of Donegal Volunteer Center, and new board member, added, “Selection of board members was via open, competitive applications. I’m really looking forward to working with my colleagues to build dynamic Gaeltacht communities.”

The two, alongside ten other members, including Eunan MacCuinneagain, manager of Westbic, in Kilcar and a yet-to-be selected Donegal Council representative, face what Ni Ghallchoir termed “some daunting and challenging tasks ahead.”

At present, several former Donegal Udaras board members are under investigation by respective public ethics bodies for allegedly padding their expenses.

Concern over board and employee expenses accrued came to the fore over the last week when TDs at an Oireachtas Joint Committee were told by Minister’s Jimmy Deenihan and Dinny McGinley that half this year’s budget (€9.8 million in 2012) goes towards paying pensions of 136 former employees. Details are forthcoming as yet as to how much of the remaining budget goes into salaries and expenses of the 90 full-time employees and board members. Sinn Fein Senator Trevor Ó Clochartaigh said, “I nearly fell off the chair when I heard that,” adding, this raises serious concerns regarding the levels of monies being paid. Mean salaries at Udaras are around 80,000 euro.

In addition, it has been revealed that five Donegal board members were paid more than half a million euro in fees and expenses over the five-year period, 2004 to 2009. In this regard, board member O’Cuirean  said, “It is a major step forward that we can save half a million euro on fees and expenses by reducing the board while maintaining full geographical representation and that the money saved can go towards worthy community or entrepreneurial projects.”

Frank McBrearty, Mayor of Donegal, bemoans the delay in having a council member appointed to the board. “It is a sad reality that investigations into former board members’ expenses, including our council nominee, David Alcorn, is underway but that means we are short one person on the Udaras board. That does not benefit the community here. It must also be remembered, those being investigated are innocent until proven guilty. I can understand Minister McGinley’s not wanting to have egg on his face by appointing someone until things are clarified.

Udaras has come under criticism in the past by various national bodies in the past including the Dail’s own multi-party Public Accounts Committee (PAC) which examines the spending of public monies. Bernard Allen, former Fine Gael TD and head of the PAC, who launched an examination of Udaras financial affairs that helped lead to the board’s restructuring, told the Donegal News this week, “I recall being very concerned about the lack of transparency in the accounts of Udaras, especially in terms of travel expenses and extra payments, both for trips within Ireland and abroad.” Those trips included, it was claimed, to Las Vegas, for officials to meet with representatives of the Irish Development Authority (IDA).

Speaking to the Donegal News, Liam O’Cuinneagain, chairperson for five years, defended his and the record of Udaras, “There was a lot of paranoia at the time about whether public bodies and semi-state ones were spending public money properly, a lot of exaggeration and misinformation. We have done a relatively successful job in helping Gaeltacht communities.”

New board members are reluctant to talk about the controversies, saying they occurred before their appointment. Chairperson Ni Ghallchoir, said, “I’d rather not comment on what went on before as I was not in any way involved with Udaras then, but to my mind, utter transparency is a given. Every citizen is fully entitled to as much information as they wish about public bodies such as Udaras and as chairperson I will make sure they have complete access to the workings of the organisation.”

Falcarragh’s O’Cuirean added, “Everyone is aware of the lack of transparency in Ireland in the past on certain matters and the unfortunate results for the country as a whole. My commitment is that in future Udaras will be completely open in its dealings so that projects – whether in culture, language or economics – are selected on merit and need, not on who certain people know. Cronyism should play no part in its affairs.”

Published in Donegal News