Inside the world of business
Allocating money when there's nowhere for it to go
JOBS ARE an emotive issue and with unemployment hovering over 13 per cent, it is little surprise that the Government has been coming under increasing pressure from the Opposition on this front.
It is a subject with which people can easily identify but one on which the Government in a recession inevitably struggles to deliver. Even with the modest return to growth reported for the first quarter, it will be some time before Ministers can expect a sustained assault on the record Live Register figure.
County and city enterprise boards around the State believe they can contribute but are being frustrated in doing so.
Thirty-five of these boards were established in 1993 to assist micro-enterprises, businesses employing 10 people or fewer, with grant support, mentoring, training.
Michael Tunney, chairman of the CEB Network, says the boards can deliver about 3,500 jobs per year over the next five years.
In a strategy document presented recently to the Minister for Enterprise, Trade and Innovation Batt O’Keeffe, they argue that they can also help sustain a further 100,000 existing jobs – many of them in small local economies across the State.
The plan anticipates financial support for close to 1,000 businesses a year but that cannot happen, the boards say, as a result of budget cuts.
While budgets were trimmed in 2008, a carryover of funds saw boards continue their operations last year. However, there is no more cash to carry over and while county enterprise boards may nominally have suffered a budget cut of just 2 per cent last December, Tunney says the real figure is closer to 26 per cent.
Worse still, even where money is available, the public sector recruitment freeze and turnover of senior staff ahead of feared changes in pension arrangements mean many boards are struggling to operate at all. Five boards are reported to have no executives in charge.
At a time when jobs and exchequer funds are hard to come by, it seems strange that the Government is allocating over €35 million to boards knowing that, in certain areas, there is no chance of it being disbursed.
Tragedy turns to farce
Anglo Irish Bank’s legal machinations concerning the disclosure of documents to the Director of Corporate Enforcement and the Financial Regulator would appear to have descended into farce.
Yesterday it emerged – in an affidavit filed in a separate case – that the bank has decided to assert privilege over some of the documents for fear of what might happen to the bank if the regulator in particular got hold of them.
The bank’s chief executive Mike Aynsley specifically raised the prospect of the regulator withdrawing Anglo’s banking licence.
The consequence of that would presumably be to bring about the immediate closure of the bank which we have been told will cost the taxpayer some €40 billion, compared to the €20-odd billion cost of the good bank/bad bank plan currently being mulled over by the European Commission.
As a result we now have a situation in which a taxpayer-owned bank believes it is acting in the taxpayer’s best interest by not co-operating with the taxpayer’s watchdogs who are charged with finding out – on the taxpayer’s behalf – what happened at the said taxpayer-owned bank. It would be comical if the stakes were not so high.
Humble suggestions from . . .
The responses to the Financial Regulator’s tough new corporate governance proposals are piling in thick and fast, among them several submissions from members of Ireland’s banking fraternity.
One financial institution in particular has taken the regulator to task on several of the proposals that it considers too onerous. The board of this particular institution is unimpressed with the suggestion that it might have to hold meetings every month. Perhaps the regulator might be so good as to scale that back to 10 times a year?
And the suggestion that the chairman of the company would have to obtain prior approval before taking on other responsibilities appears to have rankled as well. Might they suggest an appeals process be put in place in case such a request is declined?
And while the regulator is at it, perhaps it could rethink this outlandish suggestion that individuals can only hold five directorships. If the regulator ploughs ahead with this foolishness, then directors will simply have to be given a larger pay-check to compensate them for such an unreasonable restriction, it warns.
The name of this righteous bank battling for put-upon institutions everywhere? None other than Anglo Irish Bank, which posted the worst losses of any bank on the planet last year, and whose corporate governance failings have been so spectacular that they will provide ample case-study material for business schools for decades to come.
TODAY
The Oireachtas Joint Committee on Enterprise, Trade and Employment is due to meet on small business funding; and the latest data on traffic through Irish ports is due for release.
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