IT cost the Exchequer £25 million to provide subsidies to employers prepared to take unemployed people off the dole queues in 1994, according to the FAS annual report for that year, which has gone to the Government for approval. The scheme was phased out towards the end of 1994 because of its ineffectiveness.
Altogether, 9,249 people were employed under the scheme at a cost of £50 each a week to the Exchequer. It is understood that very few long term jobs were created. The 1994 FAS report, which has been seen by The Irish Times, does not quantify the final outcome.
If the Government were to introduce subsidies of £80 a week, as is being proposed, it would cost £80 million a year to provide job opportunities to similar numbers of unemployed people. FAS sources said yesterday that such a scheme would make sense only if it was targeted at the long term unemployed, and if the subsidies were given to the people taking up the jobs rather than the employers.
On the basis of the figures in the 1994 report and the Government Estimates last December, it will cost about £340 million this year to fund the Community Employment (CE) programme and provide subsidies for employers.
During 1994 the number of unemployed people and job seekers completing FAS programmes rose by 20,000 to 76,000. This was largely accounted for by an increase of 15,000 in those on CE schemes.
This is reflected in FAS expenditure trends. In 1992 FAS was spending about £120 million on training schemes and £100 million on Social Employment Schemes and other precursors of CE. By 1994, training schemes still cost £120 million but CE was consuming £218 million.
Last year the cost of CE was £262 million and 40,000 people participated. It is expected to remain at this level in 1996.
The popularity of CE remains unabated, despite frequent criticisms. According to FAS sources, up to 70,000 people would accept places on CE schemes this year if they were available.
Funding is of crucial importance. CE schemes, unlike mainstream training programmes, are not eligible for significant subsidies from the European Social Fund. In 1994 they received about £10 million, less than 10 per cent of the total. The EU subsidy will run out in 1999.
Any increase in CE placements must therefore come from the Exchequer. FAS itself has experienced serious cash flow problems, largely due to the slowness with which EU funds have been released. During 1994 FAS ran an end of year deficit of £22.4 million, compared with £7.8 million in 1993. It is understood there were similar cash flow problems in 1995.