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Thomas Molloy: Major changes required to get FAS working properly again

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The unemployment rate is continuing to slide.

The unemployment rate is continuing to slide.

The unemployment rate is continuing to slide.

AN old joke says the economy is in recession when your neighbour loses a job while it is a depression when you lose your job. Using that measure, around 300,000 people are now suffering a major depression while the rest are enduring a recession.

Yesterday, the Organisation for Economic Cooperation and Development (OECD) was scathing about job-creation schemes here and suggested sometimes brutal remedies to get people back to work.

Perhaps the most controversial proposal was a mechanism to reduce unemployment benefit for the long-term unemployed. While such an idea is alien to a country that has visceral dislike of means testing and almost any other attempt to curtail social welfare, it is common in most other European countries where initial payments can be very generous but soon taper off. The continental model can be harsh but it acknowledges a simple fact that almost all long-term unemployed people can attest to; living on the dole quickly saps morale, energy and ambition. Sometimes a prod is needed.

The OECD also highlighted a peculiarity of the Irish job market which is often ignored; around 440,000 people claim benefits but only 300,000 describe themselves as unemployed. In most countries it is the other way around; more people claim to be unemployed than receive benefits.

Our own statistics suggest that 140,000 people collect the dole while not considering themselves unemployed. There is clearly scope for some thinking here.

That the Paris-based thinktank should have made such a detailed attack on the State's back-to-work schemes just weeks after the Dublin-based Economic and Social Research Institute also criticised FAS and other job-creation schemes is significant. The OECD listens to the governments that pay its wages and it is not stretching things too far to suggest that the new Government won't be devastated to hear criticism of the previous government's policies.

In time, these reports may well provide cover for a Government intent on saving money and eager to force people to take jobs.

Yesterday's report also says that FAS is bad at interacting with the unemployed and often ineffective.

As the Government plans to break up FAS and wrap it into two different ministries, this may all seem a little academic but it highlights that fact that job creation is not easy. After years of petty scandals and the much more serious failure to help the long-term unemployed back into work, many people will probably say good riddance.

The OECD highlighted the real problem with FAS, which was not rounds of golf in fancy courses in Florida but the agency's inability to retrain people who are out of work.

Because FAS is still being run for the convenience of the bureaucrats rather than the unemployed, we still see the disgraceful situation where jobseekers are being channelled towards courses suitable for those seeking work in the construction industry. This suits the teachers of these subjects but it does not serve those who need work, or the country.

One of the OECD's most straightforward demands is that this sort of thing stop and new training courses be introduced in subjects such as online marketing or energy conservation.

Ensuring that what little money the State has to spend on training goes on the right subjects must be a priority for the ministers who will soon be responsible for the disembowelled FAS. Information technology is one obvious area where employers are struggling to fill positions despite the downturn.

That FAS has had to cancel hundreds of diplomas handed out during the good times highlights the fact that we are often using the wrong diploma-awarding agencies. It also helps to explain why our houses are still so poorly built and why it is still so difficult to find a plumber who can install a central heating system efficiently.

Most FAS diplomas are awarded by British organisations not known for their rigour. It is time to aim higher and insist that diplomas awarded by FAS and other job creation programmes really are the best in their class, not just off-the-shelf awards from our nearest neighbour.

This will all require considerable changes. Teachers who have taught for years will have to be put out to grass while new subjects such as computer games design will have to be taught despite the inevitable and understandable misgivings that they are nothing more than trendy subjects.

Some courses will inevitably fail but it is hard to imagine that they will be much worse than the existing government programmes which have been proven to actually reduce your chance of finding work.

FAS is now a byword for perks, waste and wasted opportunities but it is important to remember that it was an innovative organisation back in the 1980s and it could be an innovative organisation once again. The present Government's desire to bury the organisation is understandable but it fails to acknowledge that every country must have job centres and training with case officers and the like to help people get back to work.

The OECD is right to highlight that our benefit system is out of kilter with the rest of Europe while our job-creation schemes are training people for the wrong jobs. Despite this, it would be a mistake to throw the baby out with the dirty bath water. We need job creation in the right sectors and we need to calibrate the incentives from time to time to ensure that people take up the training offers. We live, as the OECD correctly says, in a society where there is "mutual obligation".

Irish Independent