must be redrawn
The regional aid or investment aid guidelines for foreign companies investing in areas of high unemployment need to amended immediately by the Department of Enterprise, Trade and Innovation.
The amounts involved should be increased and weighted more towards areas suffering the highest levels of unemployment in order to incentivise foreign investment in regions outside of Dublin, Cork and Galway.
IDA chief executive Barry O’Leary said this week that even with regional incentives, it was proving increasingly difficult to convince companies to invest outside Dublin and Cork.
Ever since Mr. O’Leary took over the IDA in 2008 there has been an increased concentration of jobs created by foreign firms in Dublin, Cork and Galway. I do not believe the IDA has any serious policy for attracting investment in the regions outside of these urban areas and the problem is getting worse not better.
Research carried out this year by professors at NUI Maynooth found that as much as 82% of jobs created here by overseas firms in the past six years have been centred around Dublin, Cork and Galway. They found that almost 80% of jobs created by new foreign firms in the last decade were located in Dublin, Cork and Galway.
These three cities also accounted for 62% of job gains in existing foreign firms and less than half of the job losses in that period. The process of concentration in these three cities has accelerated since the onset of the economic crisis in 2007.
New investment aid guidelines are scheduled to be drawn up in 2013 and the Department of Enterprise, Trade and Innovation is involved in that process with the EU commission for the post-2013 period.
I believe the Minister should disclose immediately any draft submissions that have been made by Ireland as this process comes to a conclusion and I will be tabling Dáil questions in that regard.
In my opinion, the investment aid guidelines should ideally be amended immediately to reflect the urgent necessity to increase incentives for those regions that have effectively become foreign-investment-free zones.
Under the Irish Regional Aid map, the highest rates were afforded to the Border, Midlands and West (BMW) region. For the period of 2007 to the end of 2010 the region qualified for a rate of 30% for large firms and for medium and small firms the rates were 40% and 50%.
In accordance with the guidelines, a reduced rate of aid for the BMW region came into being in 2011: 15% for large companies, 25% and 35% for medium and small firms. The maximum current aid rates for eligible regions within the Southern and Eastern Region remain at 10% for large companies, 20% and 30% for medium and small firms, which are lower thresholds than the BMW region.
The scheme isn’t working. It isn’t incentivising foreign companies sufficiently to invest in the regions.
The objective of the Regional Aid (Industry and Services) Scheme 2007–2013 is to provide support to enterprises that are seeking financial assistance to establish an initial investment and/or job creation linked to an initial investment project in Ireland.
The scheme isn’t working. It isn’t incentivising foreign companies sufficiently to invest in the regions. As well as that, the IDA, despite regular protestations to the contrary, are focused primarily on a few urban areas. These regional or investment aid guidelines need to be redrawn immediately.