Saturday 22 July 2017

IDA criticised as Connect Ireland job figures upped

IDA under fire as new study says Connect Ireland has created thousands of jobs

Connect Ireland chief executive Joanna Murphy.
Connect Ireland chief executive Joanna Murphy.

Fearghal O'Connor

The jobs initiative Connect Ireland has created more jobs and is having a bigger impact on the economy than the Government or IDA has previously admitted, according to new information seen by this newspaper.

A new economic assessment of the privately funded jobs creation agency found that it could generate €333m for the Exchequer by 2020, while, separately, the Department of Enterprise also admitted that the potential number of jobs Connect Ireland would create is over 2,500.

Connect Ireland founder Terry Clune
Connect Ireland founder Terry Clune

The new information comes as state agency IDA came under strong attack in the Dail and in public submissions over its failure to renew Connect Ireland's contract.

The initiative, set up by businessman Terry Clune, has continued to carry out its work since its contract ended in March without any state income in anticipation that the Government will launch a promised review of the matter.

The Department of Enterprise also admitted that while the total number of Connect Ireland client jobs that had been verified by the IDA had risen from 535 to 575, the pipeline of jobs was much higher.

"The IDA has confirmed that it has approved companies projecting the creation of an additional 1,961 jobs over the next three years (providing a current potential jobs figure of 2,536)," it said in a statement.

But a new economic report carried out last month states that the real impact of Connect Ireland is even higher again. "The total jobs generated as a result of Connect Ireland's client companies is between 3,421 and 4,500 across the entire economy," said the report by economist Annette Hughes of DKM Economic Consultants. This would generate an additional €277m to €333m for the Exchequer, according to the DKM report, which was commissioned by Connect Ireland.

This impact was higher than when DKM carried out a previous economic assessment in 2015 and "would appear to indicate that the initiative gathered momentum over recent years," it said.

The department also addressed claims, made in the draft terms of reference of the review and repeated by then minister Mary Mitchell O'Connor in the Dail in March, that Connect Ireland had been set a target of 5,000 jobs. "There was no contractual target," said the department.

Meanwhile, Fianna Fail's enterprise spokesperson, Niall Collins, hit out at what he described as IDA's "reprehensible" treatment of Connect Ireland. In a statement in the Dail he disputed reports that legal action had been taken by Connect Ireland against IDA.

"There was a dispute and that is not at issue. For IDA Ireland to allege there was legal action and to seek to hide behind the veil of impending court proceedings was very disingenuous. We must be very honest. IDA Ireland is not above questioning or scrutiny, and in this instance it has acted quite dishonourably," he told the Dail.

He said IDA has "backtracked" on some statistics and "it has acknowledged that Connect Ireland has delivered far more than IDA Ireland had previously stated."

Collins said Connect Ireland had built up momentum and that "we are letting a really good opportunity slide by, all on the basis that IDA Ireland is the golden boy."

"I am calling out IDA Ireland on its treatment of Connect Ireland, which has been reprehensible. It feels threatened by Connect Ireland, although it should not. IDA Ireland must be bigger than that," Collins told the Dail.

An IDA spokesman said that, as detailed previously to an Oireachtas committee hearing, "it was acting on legal advice received from counsel that we should not appear to discuss the Succeed in Ireland initiative owing to a legal dispute."

The new Minister for Enterprise, Frances Fitzgerald, told the Dail that she hoped to see a resolution and that the review into Connect Ireland's work would be carried out "after details of the initiative's full and final costs are available".

As part of a public consultation period the Department received submissions from companies, public representatives and other bodies, including the GAA, that this newspaper understands are overwhelmingly in favour of continuing the Connect Ireland programme.

In one submission, former chairman of the Public Accounts Committee John McGuinness questioned why the IDA is forcing Connect Ireland to "disband and destroy" its "nationally valuable network" of 90,000 worldwide members.

"Why would IDA do this? Who benefits if the network is broken up?" wrote McGuinness, who called for an investigation into why the IDA board decided not to renew Connect Ireland's contract.

"How is this decision in Ireland's national interest?" he wrote, while also querying what evidence was presented to the IDA board to justify the decision.

Charles McLaughlin, director of NetNeutrals EU, a Wisconsin-based online dispute resolutions platform, which established its EU office in Dublin last October, said in a submission he was "really disappointed" about the non-renewal of Connect Ireland's contract "as we had been through the IDA, EI [Enterprise Ireland] and LEOs [Local Enterprise Offices] and found ConnectIreland were the only organisation who supported us."

UK consultancy firm Alien Technology Transfer, which also opened a Dublin office last year, also expressed disappointment in a submission. "We ask that the review consider the value to small companies such as ours in accelerating our activity and revenue though being part of a government-backed initiative," wrote chief operating officer Paul Pietrangelo.

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