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Column: We should be giving jobless people the money we’re wasting

The funds we’re currently spending on make-work training programmes should be handed directly to unemployed people, writes Aaron McKenna.

Aaron McKenna

Aaron McKenna wrote about the ‘Lost Decade’ Ireland is facing into, and why we need a new vision for the nation to bring us through it. In this fifth part of his series on ways forward, he charts a course for turning our unemployed into the best trained workforce in the world.

LIKE ALL FAILED generals, our politicians are well prepared to fight the last war when it comes to tackling unemployment. They propose programmes to encourage property and construction activity and move the deck chairs round on unemployment supports and retraining, without grasping the hard reality: Among our unemployed we have a workforce that is not skilled in the right areas – or that is rapidly becoming stale.

Long term unemployment is now the norm, with 56 per cent of people unemployed for over a year versus 25 per cent in 2009. A person unemployed for a long period of time loses skills and their experience becomes less relevant. A large number of the unemployed today come from sectors that will never recover to where they were, principally construction.

Time is one of the greatest assets we have. We have an entire section of our workforce sitting idle – many going out of their minds in boredom – and no real attempt is being made to turn this time into a great opportunity. Imagine what you could learn in just a year, if properly supported?

Instead people are being encouraged to go out and look for jobs or have their benefits cut at a time when the real domestic economy is still contracting. New jobs are mainly in export-led companies that require skills most jobseekers either don’t have, or their skills are outdated compared to those of new graduates.

To combat this skills gap the unemployed have FÁS Nua or one of its affiliated state bodies that still live in the last century in their approach to training or producing tangible benefits.

FÁS runs nearly as many day courses in construction related topics as computer hardware, networking and programming combined. So much about FÁS and its state run relations is perverse. It’d be funny if it wasn’t so tragic – like studies indicating certain FÁS courses leave one less likely to get a job; the provision of courses completely disconnected from real economic needs; or the continuation of make-work courses, like spending four weeks learning how to write a CV.

‘The unemployed should spend the money directly’

Back in 2007, when nearly everyone could get a job, FÁS had almost €15,000 to spend on those who passed through its doors. Part of that was the management and junket fee. Today FÁS only has €2,200 to spend per head, and its budget would have to be €6.7billion today to match the spending from 2007. Instead the budget is €60million less.

Nevertheless if we cut out FÁS and other program spending, like that from VECs, we have about €2,500 to spend on each unemployed person today for training, about €1.2billion a year. This is money government might see as a soft target to cut. But I think it ought to be increased as an investment in our future prosperity.

I think we should be spending quite a bit, as much as possible, on turning the idle time of unemployment into a productive period of up-skilling and diversification. But I don’t think the public sector should spend it. I think the unemployed should, directly.

We should abolish bloated quangos like FÁS that simply eat a disproportionate amount of cash in management fees and make-work programs and give each unemployed person a grant to pursue courses, both in our existing higher education system and through private sector initiatives.

We should apportion grants to courses on a points-based system, where courses with more economic benefit – ie more likely to result in a job – are apportioned more points. While it is philosophically ideal that government should allow free learning, in a time of limited resources it is better to encourage the provision and uptake of courses in the likes of computer networking and programming or lab work than the old pastimes.

We should create this points matrix with an independent assessment body built around industry and academia, not civil service and social partnership. A body tasked with looking at near and mid-term trends in business, science, foreign investment and new export markets to make judgements on what courses can provide the best outcomes for jobseekers.

Institutions and courses receiving grants should undergo audits to ensure that they are not producing cardboard qualifications, but ones that employers and students feel are valuable to have.

‘People deserve the chance to compete’

People should be pushed towards taking up their grants and getting results, with penalties for not showing up, participating or getting good grades without explanation. They should be assisted by their welfare officers to get onto courses that suit them in the first place. This is some stick to the program, but it is far outweighed by the carrot: A tangibly beneficial investment into a persons future.

This would also be an investment in our education sector, growing new providers as well as bolstering existing ones.

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Most of all it would be a major investment into our future economic prosperity with a vast cohort of our workforce increasing their skills, many of them mid-career, to match the jobs of tomorrow that will be of benefit to us all.

We would see more companies attracted by our workforce, less need to import workers for highly skilled roles – as happens today in tech firms – and combined with supports for entrepreneurs we would see more unemployed people given the spark to get minds and bodies moving to create new businesses of their own.

We would also avoid sending our unemployed back into the world of work by way of lower quality, less rewarding jobs, thanks to skills erosion. People deserve the chance to compete for the best that their abilities will allow them to attain, unhindered by years of unemployment that is no fault of their own.

People deserve the chance to take their destiny back into their own hands by working hard at up-skilling on quality courses.

To provide this opportunity, as to do most good reforms, we would need to tackle some vested interests. In this case the enemy is the bureaucracy that never willingly lets its empire be broken up and those who support it to protect their own space in that empire.

I guess we need to decide which is more important: protecting the bureaucracy that exists today, or the jobs that might come tomorrow if we’re prepared to take them?

Aaron McKenna is Managing Director of the e-commerce company He is also writing a book on the future of Ireland to be published later this year.

You can read his previous pieces on the way forward for Ireland on here.

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