High Level Group on Business Regulation - DBEI...High Level Group on Business Regulation 5 ... Such...

High Level Group on Business Regulation

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Contents

Chairman’s Foreword 4

Summary and Recommendations 6

Introduction 9

2012 Work Programme 11

Cross-Government Project to Measure and Reduce Administrative Burdens

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Communicating with Business – businessregulation.ie 38

Appendices 1. Membership 43

2. Terms of Reference 44

3. Subgroup Reports 45 Regulatory Impact Analysis Report Nursing Homes Report

Late Payment and Government Invoicing Report Audit Exemption Report

VAT Cash Accounting Rules Report Part-time Staff Procedures Report Health & Safety Issues Report


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Chairman’s Foreword

Upon my appointment as Minister for Small Business I was determined to engage with business directly and to hear first-hand about the issues affecting the Irish economy. Chairing the High Level Group on Business Regulation gives

me the opportunity to hear members’ concerns and work closely with business on a variety of important areas.

I was keen to build on the Group’s work as a forum for officials from key Government Departments and agencies to come together with business and

union representatives to tackle administrative burdens on Irish business. The Group has acted for years as a clearing house for specific business suggestions

for red tape reduction by identifying administrative simplifications across all of Government.

In order to increase the business focus of the Group I have expanded its membership to include more individual entrepreneurs and representatives of key

business associations. I am determined that the High Level Group should deliver results for the economy; its 2012 work programme has focused on finding

practical solutions to deal with priority issues. This year, the business and union members themselves have taken the lead and chaired the subgroups which are driving forward the Group’s work programme. This new approach has

reinvigorated the Group and is delivering results. A range of recommendations from these subgroups have been included in the Action Plan for Jobs 2013.

As you will see throughout this Report, the High Level Group has been a great partner in the Department’s other efforts to respond to the needs of business,

from its input into the development of businessregulation.ie to the feedback it provides on the cross-Government project to measure and reduce administrative

burdens. There is an unequivocal need for a regulatory framework to support a

functioning economy but we must endeavour to design regulation that does not burden business with unnecessary administration; regulation should enhance

competitiveness, not hamper it. Reducing administrative burdens is about creating a smart regulatory framework that works for all of society; it has nothing to do with deregulation.

I would like to take this opportunity to thank all of the members of the High

Level Group for their time and valuable contributions. I am particularly grateful


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to the chairs of the subgroups who have devoted significant extra effort to

progressing the Group’s priority issues.

I look forward to working together in 2013 to make further progress on this important agenda.

John Perry TD Minister for Small Business


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Summary and Recommendations

This Report provides an analysis of the work undertaken by the High Level Group on Business Regulation in 2012. The Group’s work was threefold. In the first

instance, it provided feedback on a cross-departmental project to measure administrative burdens arising from legislation. The Group also provided advice

towards the development of the new businessregulation.ie web portal on compliance information for business. However, the bulk of the Group’s work involved an ambitious work programme set by the business members of the

Group early in 2012.

Priority issues were identified by the Group and eight sub-groups were subsequently set up to consider and report on them. Each subgroup was chaired by a nominated Group member and supported by staff from the Department of

Jobs, Enterprise and Innovation’s Business Regulation Unit (BRU). The issues considered and the sub-groups’ recommendations are the following:

1. Focus Regulatory Impact Analysis on business impacts

The High Level Group / Department of Jobs, Enterprise & Innovation should

champion the importance of measuring business impacts accurately in the context of RIAs conducted by all Departments.

Resources should be prioritised to facilitate the preparation of RIAs on policies that have a specific business impact. 1

Formal coordination between Departments on Better Regulation should be established.

The progress of RIAs, on domestic and EU proposals, should be tracked centrally and published. 1

RIA expertise should be tracked across Government and developed.

The existing RIA Guidelines (2009) should be updated where necessary.

2. Administrative burdens on nursing homes

Completion of registration and renewal of registration should be possible online. 1

Where operators have already established the accuracy of certain information and it cannot change the original proof should be accepted as still valid. 1

Where operators have already established the accuracy of certain information

and it has not changed, it should be possible to make a declaration to this effect and have the original proof accepted as still valid. 1

HIQA should consider generating more guidance for nursing home operators on compliance with relevant regulations and related standards; HIQA should also

1 The High Level Group suggested this recommendation for inclusion in the Action Plan for

Jobs 2013


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consider working with other relevant bodies on guidance on overlapping standards and other regulatory requirements. 1

3. Late payments; Government invoicing and purchase orders

Building on a commitment in the Action Plan for Jobs 2012 and the work of the

Advisory Group on Small Business, a Prompt Payment Code of Practice for business should be agreed and introduced by business. Companies which sign up

to the Code would be publicly committing to make payments within agreed timeframes.1

Once the Code is completed an information campaign should be launched to introduce it to business and to make SMEs in particular aware of legislation

governing 30 day payment rules. 1

A Government champion should be identified to promote the Prompt Payment

Code and to be the face of the information campaign.

Introduce a Procurement Pledge as a demonstration of the Government’s

commitment to ensuring that the public sector is faster to do business with. Such a pledge would commit to adoption of standard barcodes and EDI

solutions.

4. Audit exemption

The audit exemption thresholds should be raised to the EU maximum limits.

Companies should be able to avail of audit exemption when two of the three criteria are met; companies must currently meet all three criteria.1

Allow small groups of companies to avail of audit exemption (this has also been proposed by the Company Law Review Group) and investigate the possibility of

allowing dormant subsidiary companies to avail of audit exemption.

Move the effective audit exemption appeal process from the High Court to the

District Court to allow for faster, more cost effective processing.

5. VAT rules in relation to cash accounting for SMEs

Raise the threshold to €2 million before 31 December 2012.

Index the threshold and increase the base rate in future on the basis of further analysis.

1 The High Level Group suggested this recommendation for inclusion in the Action Plan for

Jobs 2013.


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6. Procedures for hiring part-time staff

Introduce an hours-based system for calculating entitlement to jobseeker payments.

Administrative processes need to be modernised by linking Revenue and DSP system more effectively, introducing more online systems and aligning forms and information requests to employers with existing payroll timelines and

systems.

Improve awareness of existing schemes and entitlements for jobseekers by outlining these through a targeted information campaign.

7. Health & Safety issues:

Free eyesight tests covered by PRSI should include tests related to use of display

screen equipment.

NOTE:

The views expressed in the sub-groups’ reports are those of their members and do not necessarily reflect those of the High Level

Group as a whole.

In some instances, the views presented require further consultation with relevant Government Departments for a detailed

analysis of the substance of the issues and to determine the extent to which the recommendations can be progressed.


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Introduction

Effective Better Regulation policies continuously improve the regulatory environment in which business operates; reducing administrative burdens on

business is a key element of the Better Regulation agenda. The High Level Group on Business Regulation (HLG) was established in 2007 to act as a forum for

dialogue on administrative burdens bringing together business, trade unions and key Government Departments. Its primary role is to act as a clearing house for potential regulatory simplifications brought to its attention by business.

Administrative burdens can act as a drag on economic growth and divert

economic resources away from productive activity; reducing these burdens therefore increases competitiveness and supports job growth. Reducing administrative burdens does not involve undermining the goals of existing

regulation; the objective is to simplify and streamline administrative activities while ensuring the same policy goals are achieved. The Group is adamant that

simplifying the administrative processes underlying regulation actually improves compliance and thus increases the effectiveness of regulation. Although the HLG focuses on the impact of regulation on business the Group is conscious of the

potential benefits accruing to Government from administrative simplifications and use of streamlined systems.

SMEs are a key component of the Irish economy and the backbone of employment in Ireland. Due to their size, however, the burden of regulation

often impacts smaller businesses disproportionately. The HLG is always mindful of this fact and consistently looks for ways to reduce the impact of

administrative burdens on SMEs in particular.

What are administrative burdens? Administrative burdens are often referred to as red tape but a precise definition

of the term is necessary to understand how these burdens can be reduced without undermining policy goals. The first step is to break down the costs of regulation into three components: financial costs, compliance costs and

administrative costs. Financial costs refer to things such as paying taxes, dues, fees or fines. Compliance costs relate to the activities required by the regulation,

such as the purchase of equipment or the adoption of new procedures. Administrative costs relate to Information Obligations (IOs) arising from regulation, such as the filling out of forms or provision of other data to public

bodies.

The distinction between costs and burdens is important. An administrative burden is defined as relating to those IOs (or parts thereof) that a business

would not carry out unless required by legislation. What this means is that ‘business as usual’ costs are not considered a burden if a normal business is likely to incur such costs even if not required to do so by law. Company

accounts, for example, are likely to be prepared by companies even if there was no regulation requiring it; a large part of the administrative cost of preparing

these accounts would therefore not be classed as a burden.


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The High Level Group’s work in 2012

The HLG met formally on six occasions in 2012 and discussed a wide range of regulatory issues across the Irish economy. The HLG pursued an ambitious work

programme set by the business members of the Group; the bulk of its work was carried out by subgroups, chaired by HLG members and supported by staff from the Department of Jobs, Enterprise and Innovation’s Business Regulation Unit

(BRU). The Group was also consulted by the Department and other Government bodies on new and existing projects aimed at reducing administrative burdens

on business. Throughout 2012, the Group provided feedback on a substantial project to measure and reduce administrative burdens across Government and has helped guide the development of the new businessregulation.ie web portal

on compliance information for business.


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2012 Work Programme

In late 2011 the secretariat to the High Level Group on Business Regulation asked the business and employee representatives on the Group to identify

specific administrative burdens and related issues that could be tackled as part of the Group’s 2012 work programme. Over 70 separate issues were submitted

for consideration, many of them collected directly from businesses in the case of the business associations and representative bodies on the Group.

The secretariat examined the various submissions to clarify certain points and to ensure they were within the Group’s terms of reference; the assembled issues

list was then circulated to all HLG members for consideration. The Group decided to prioritise 12 issues for action during 2012. Four of the prioritised issues relate to licensing and so were grouped together; another two issues relate to Health &

Safety and were also grouped together. Eight subgroups were then formed to investigate these priority issues and report back to the Group before the end of

the year. Business and employee representatives on the HLG were asked to chair the subgroups and a staff member from the Department’s Business Regulation Unit was assigned to each subgroup to support its work.

The eight subgroups and chairs are listed below:

Issue Chair

1. Focus Regulatory Impact Analysis on business impacts Marie Daly

2. Administrative burdens on nursing homes Esther Lynch

3. Late payments; Government invoicing and purchase orders

Jim Copeland

4. Audit exemption Mark Fielding

5. VAT rules in relation to cash accounting for SMEs Ian Talbot

6. Procedures for hiring part-time staff Tim Ryan

7. Health & Safety issues: Extend Safe-Pass validity, recognise qualifications from

other Member States

Frank O’Donnell

8. Licensing for business:

Alcohol licences, auctioneer licences, Integrated Pollution

Prevention Control licences, ‘Table and Chair’ licences

Tara Buckley


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Each subgroup was asked to thoroughly examine the issues assigned to it and to

devise practical recommendations to deal with identified problems, following consultation with relevant stakeholders. In the case of seven subgroups, reports

were ultimately drafted setting out the particular issues at stake and listing recommendations for action. The work of some subgroups could not be fully completed in 2012 and will continue into 2013. Late in 2012 the

recommendations of all subgroups were discussed by the HLG and submission of a smaller number of recommendations to the Action Plan for Jobs 2013 was

agreed. The content of the subgroup reports is summarised below. The full reports of

each subgroup are appended to this Report. The contents of the reports are the work of the subgroups, which comprised business and union members of the

HLG.

NOTE:

The views expressed in the sub-groups’ reports are those of their members and do not necessarily reflect those of the High Level

Group as a whole.

In some instances, the views presented require further

consultation with relevant Government Departments for a detailed analysis of the substance of the issues and to determine the

extent to which the recommendations can be progressed.


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1. Focus Regulatory Impact Analysis on business impacts

Chair: Marie Daly Members: Garrett Fennell Secretarial Support: Jonathan Patchell Frank O’Donnell

The subgroup focused on considering how regulatory burdens could be reduced

through the systematic use of Regulatory Impact Analysis (RIA). The subgroup believes that unnecessary burdens hinder competitiveness, add to business costs and ultimately reduce employment creation and retention. They also constitute a

wasteful use of public resources given efforts after enactment of particular legislation to reduce unnecessary burdens which could have been avoided in the

first place. The subgroup examined existing Government commitments on RIA (in the

Programme for Government and the Action Plan for Jobs 2012) and also relevant EU developments. Answers to recent Parliamentary Questions (PQs) on the

implementation of RIA in individual Government Departments gave an up to date view of activity across Departments. The subgroup discussed RIA issues with Tom Ferris, an expert on RIA who previously worked in the Department of

Transport. The subgroup also met Robert Watt, Secretary General of the Department of Public Expenditure and Reform (DPER), and officials from that

Department; DPER has been tasked with organising training to Departments in their conduct of RIAs and coordination with other Departments to ensure appropriate supports for RIA.

The commitments in the Programme for Government make it clear that the RIA

system is important as a quality proofing mechanism for proposed legislation. It has benefits for both the public and business sectors; for the public sector it has the potential to enhance the quality of decision making and cut down on

unnecessary administrative burdens and the resultant inefficiencies generated; for business RIAs improve the integrity of legislation by ensuring costs and

alternatives are examined. All significant regulatory legislative proposals must be accompanied by a RIA.

RIA in Ireland is maturing from its developmental stage; as such it is at a critical juncture where expertise and expectations have been established and the quality

and usefulness of RIAs, while variable, has been improving. However, the Better Regulation Unit of the Department of the Taoiseach, which had responsibility for

fostering RIA across Government, was disbanded in 2011. Observations

The replies to recent PQs on RIA indicate that there is a patchy approach to the commissioning and quality of RIAs; in many instances Departments are not

carrying out RIAs or are producing them at a late stage in the policy and legislative process to justify decisions already taken. This is a misapplication of the RIA process which is meant to guide policy development and not be a tool to

justify policy decisions.

While there are issues with the quality of some RIAs the larger systemic problem appears to be the lack of centralised oversight given that the Department of the Taoiseach is no longer involved in RIA. The buy in to RIA by DPER seems


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limited; the Department appears focused on a broad range of significant

challenges (public sector reform, expenditure reductions, sale of State Assets, engagement with the Troika, etc.) which has meant that there are neither the

resources nor spare capacity available for a renewed focus on RIA. Given that DPER is the Department charged by Government with a central

oversight role and with most of the original RIA expertise (staff from the Better Regulation Unit were redeployed to DPER), it is difficult to see how RIA can

progress if the focus of the Department on RIA remains as it is. DPER’s approach is also regrettable given the expertise on evaluation which resides in the Department and the resulting lost opportunity to enhance and promote RIAs as a

useful evaluation instrument.

Recommendations The subgroup’s main recommendations may be summarised as follows:

The High Level Group / Department of Jobs, Enterprise & Innovation should

champion the importance of measuring business impacts accurately in the context of RIAs conducted by all Departments.

Resources should be prioritised to facilitate the preparation of RIAs on policies that have a specific business impact.

Formal coordination between Departments on Better Regulation should be established.

The progress of RIAs, on domestic and EU proposals, should be tracked centrally and published.

RIA expertise should be tracked across Government and developed.

The existing RIA Guidelines (2009) should be updated where necessary.


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2. Reduce administrative burdens on nursing homes

Chair: Esther Lynch Members: - Secretarial Support: Jonathan Patchell

The administrative burden imposed on nursing homes when renewing their

registration with the Health Information and Quality Authority (HIQA) was raised by the Small Firms Association (SFA) and agreed as a priority issue by the HLG. To gain a fuller understanding of the issue the subgroup met with Nursing

Homes Ireland (NHI), the Department of Health, HIQA, the Irish Municipal, Public and Civil Trade Union (IMPACT), the Irish Nurses and Midwives

Organisation and the Irish Medical Association2. NHI claims that the process for renewing registration of a designated centre for

older people (or nursing home) includes unnecessary administrative burdens because information already submitted to HIQA must be resubmitted. The Health

Act 2007 requires that each designated centre must be registered with HIQA and that this registration must be renewed every three years. In order to ensure that nursing homes are fit to provide services to older people the registration process

set out in the legislation requires various information to be submitted to HIQA. The process and fact of registration confirms publicly and openly that the

registered provider is fit and legally permitted to provide nursing home services. There are currently 451 private nursing homes on HIQA’s register and

registrations will be renewed on a three yearly basis beginning in November 2012. The majority of these renewals of registration will fall in 2014 and 2015;

there is therefore sufficient time to amend the renewal of registration process before the majority of centres must renew their registration.

Administrative burdens associated with renewal of registration When examining the necessity of administrative burdens arising from regulation

it is essential to keep in mind the aims of the particular regulation; in this case ensuring the safety and welfare of nursing home residents. Nursing home

operators are required to comply with the relevant regulations intended to ensure provision of a safe and effective healthcare system in nursing homes; these regulations cover:

rights, protection, quality of life and health and social care needs of residents;

staffing and the care environment; management and governance.

HIQA has produced National Quality Standards for Residential Care Settings for Older People and also provides a guide to the standards as well as a leaflet on

registration and inspection. The relevant regulatory requirements are set out in the Health Act 2007 and associated Statutory Instruments:

Health Act 2007 (Registration of Designated Centres for Older People)

Regulations 2009

2 The Health Service Executive and Age Action Ireland were also approached but did not feel a

meeting was necessary.

http://www.irishstatutebook.ie/2007/en/act/pub/0023/index.html


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Health Act 2007 (Care & Welfare of Residents in Designated Centres for

Older People) Regulations 2009

HIQA operates a registration regime which means that nursing homes cannot operate unless registered with HIQA; records maintained by nursing homes are used to assist HIQA with its inspections and to demonstrate that required

standards are being met. HIQA inspections may be announced or unannounced and can take place at any time. The resultant reports provide information to the

residents themselves, their families and the general public about the standard of care in individual centres. Nursing home operators once registered must maintain their compliance with the relevant regulations; HIQA carries out

inspections of nursing homes to gather evidence of compliance in support of the registration regime. The registers of residential centres for older people and the

inspection reports can be viewed on HIQA’s website. The requirement to ‘register’ arises from the Health Act 2007 and is set out in

detail in the Health Act 2007 (Registration of Designated Centres for Older People) Regulations 2009 and accompanying schedules.

Initial registration and renewal of registration are both underpinned by administrative requirements set out in the above schedules; these administrative

requirements or Information Obligations are intended to provide information to help ensure the safety and welfare of nursing home residents. However the

current registration renewal system, grounded in the relevant legislation, is entirely paper based and requires resubmission to HIQA of information which may not have changed since initial registration as well as information which

could not have changed. The resubmission of unchanged information that has been previously verified by HIQA constitutes an unnecessary administrative

burden on nursing home operators. Recommendations

The fundamental principle underlying the subgroup’s recommendations is that there should be a clear relationship between information requirements and the

protection of the safety, welfare and dignity of the resident in the nursing home.

The subgroup’s recommendations may be summarised as follows:

Completion of registration and renewal of registration should be possible online.

Where operators have already established the accuracy of certain information

and it cannot change the original proof should be accepted as still valid.

Where operators have already established the accuracy of certain information and it has not changed, it should be possible to make a declaration to this effect and have the original proof accepted as still valid.

HIQA should consider generating more guidance for nursing home operators on

compliance with relevant regulations and related standards; HIQA should also consider working with other relevant bodies on guidance on overlapping standards and other regulatory requirements.


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3. Late payment; Government invoicing and purchase orders

Chair: Jim Copeland

Members: Patricia Callan Secretarial Support: Eric Giguère Mark Fielding

Late payment The subgroup investigated the current situation on late payments and pending

initiatives in the area. While the Government has extended its 15-day payment rule in the public sector beyond Government Departments this has not altered

the payment behaviour of companies in the private sector. Surveys by ISME and the SFA suggest that the average payment period for an SME is 623 or 714 days. Many SMEs are now in a dire financial situation due to late payment and the

consequent cash flow issues. The subgroup believes that late payments are preventing businesses, especially SMEs, from focusing on growth opportunities

as they cannot absorb the burden of not being paid on time. The legal cost of pursuing debtors in the courts also remains problematic.

Legislation to combat late payment in commercial transactions came into effect in 2002 providing that interest will become payable if payments for commercial

transactions are not met within 30 days, unless otherwise specified in a contract or agreement. The recast EU Directive 2011/7/EU on combatting late payment in commercial transactions is due to be transposed into Irish law in March 2013

and provides for an increase in the interest rate payable on late payments. The Directive requires Member States to provide mechanisms to both discourage late

payment and to enable creditors to exercise their right to collect.

For some the problem is not with the legislation itself but rather with its enforcement; the number of companies that charge penalty interest to their business partners is reportedly quite low. Reasons for this vary: some business

owners are not aware of the 30-day rule while others do not want to upset an established business relationship; some lack the resources to go to Court. Some

large companies are also in a position to dictate terms to their suppliers and the smaller parties are more or less forced to agree with the terms. The new Directive still contains provisions that allow the parties to contract out of this

rule and negotiate terms beyond 60 days providing that these terms are agreed between the parties and are not grossly unfair to the creditor.

The subgroup also examined French and Spanish legislation preventing parties from contracting for payment later than 60 days and discussed the possibility of

introducing mandatory payment periods. The French and Spanish regimes still require parties to go to court if payment terms are not respected.

Recommendations The subgroup believes that a cultural change needs to take place in Ireland to

encourage companies to pay in a timely manner.

3 Source: SFA 2013 4 Source: ISME 2012


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Its recommendations seek to promote such a change and may be summarised

as follows:

Building on a commitment in the Action Plan for Jobs 2012 and the work of the Advisory Group on Small Business, a Prompt Payment Code of Practice for

business should be agreed and introduced by business. Companies which sign up to the Code would be publicly committing to make payments within agreed

timeframes.

Once the Code is completed an information campaign should be launched to

introduce it to business and to make SMEs in particular aware of legislation governing 30 day payment rules.

A Government champion should be identified to promote the Prompt Payment Code and to be the face of the information campaign.

Government invoicing and purchase orders The subgroup examined electronic data interchange (EDI) and e-procurement as potential avenues to simplify Government invoicing and purchase orders. EDI

enables computer-to-computer exchange of business documents between companies and Government using a standard format regardless of the kind of computer or software being used at either end. Companies and Government

using EDI benefit from faster response time, smoother invoicing processes and cost savings from reduced physical postage.

Denmark appears to be a leader in this area and so the subgroup examined the

Danish experience. A dedicated Agency for Digitisation under the Ministry of Finance promotes efficient and effective digitisation across the public sector. A Public Payment Act passed in December 2003 identified introduction of e-

invoicing as providing a potential efficiency saving of approximately €30 million per year. With a total of 15 million invoices per year there was an estimated €2

reduction in handling cost per invoice; this is certainly a conservative estimate with experience showing that reductions of up to €8 reduction per invoice may be expected.

Following on from the Danish e-invoicing initiative, the Pan-European Public

Procurement Online Project (PEPPOL) was established in 2008 by the European Commission to facilitate e-invoicing more broadly in the EU. Ireland is one of 12 Member States participating in PEPPOL. E-invoicing is currently being piloted

with six Irish public sector bodies using EDI.

Recommendations The subgroup believes that reforms to Government invoicing and purchase orders could yield significant savings for the economy.

The subgroup’s main recommendation may be summarised as follows:

Introduce a Procurement Pledge as a demonstration of the Government’s

commitment to ensuring that the public sector is faster to do business with. Such a pledge would commit to adoption of standard barcodes and EDI

solutions.


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4. Audit exemption

Chair: Mark Fielding Members: - Secretarial Support: Eric Giguère

The subgroup explored a range of issues around the audit exemption which may be availed of by companies when specific criteria are met. The possibility of an

audit exemption was introduced in 1999 and has been repeatedly modified since. As of 2006 three key criteria are used to determine the eligibility of a company for audit exemption; companies must

have an annual turnover not exceeding €7.3 million;

have a balance sheet total not exceeding €3.65 million per year; employ an average of not more than 50 employees.

Certain types of company are always excluded from the possibility of availing of audit exemption, for example companies which are part of a group. As external

audits incur a cost for companies there may be a financial benefit for companies in availing of audit exemption, where eligible.

EU legislation sets maximum limits for the turnover, balance sheet and number of employees which may be used by Member States when setting audit

exemption thresholds. The EU maximum limits are: turnover of €8.8 million, balance sheet total of €4.4 million and an average of 50 employees. The Irish thresholds set in 2006 were therefore below the allowed maximum for both

turnover and balance sheet total.

The subgroup also considered penalties which are imposed on companies by the Companies Registration Office (CRO) where annual returns and accounts are filed late. In addition to monetary penalties, late filing of annual returns results

in the loss of audit exemption for a company. While the UK also imposes monetary penalties on late filing companies but there is no equivalent to the loss

of audit exemption imposed in Ireland. Where a company loses its audit exemption in a given year it must file audited accounts for both that year and the following year. The Association of Chartered Certified Accountants (ACCA)

made a presentation to the High Level Group arguing that the loss of audit exemption should be removed as a penalty for late filing. The ACCA contends,

for example, that the loss of audit exemption is a disproportionate punishment for late filing of annual returns and accounts as the cost of an audit could be at

least €1,000 in addition to the monetary penalty imposed by the CRO. The subgroup was also concerned with the fact that the CRO does not have the

authority to reinstate audit exemption once lost; the only route for appeals is application to the High Court for an order extending the period within which an

annual return may be filed. Such High Court applications are so costly as to render this appeal process prohibitively expensive, particularly for SMEs.

Recommendations The subgroup’s recommendations are intended to deal with the main problem

areas outlined above; some of the recommended changes are already being progressed by the Department.


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The subgroup’s main recommendations may be summarised as follows:

The audit exemption thresholds should be raised to the EU maximum limits5.

Companies should be able to avail of audit exemption when two of the three

criteria are met; companies must currently meet all three criteria.

Allow small groups of companies to avail of audit exemption (this has also been

proposed by the Company Law Review Group) and investigate the possibility of allowing dormant subsidiary companies to avail of audit exemption6.

Move the effective audit exemption appeal process from the High Court to the District Court to allow for faster, more cost effective processing.

5 This has since been put in place as the Minister for Jobs, Enterprise and Innovation signed the Companies (Amendment) (No. 2) Act 1999 (Section 32) Order in August 2012, which raised the audit exemption thresholds to the EU maximum. 6 These matters are addressed in the Companies Bill which was published on 21st December 2012.


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5. VAT rules in relation to cash accounting for SMEs

Chair: Ian Talbot Members: - Secretarial Support: Mary Killeen

The subgroup examined the potential for changes to the VAT rules relating to

cash accounting for SMEs as the current threshold of turnover of €1 million is considered by business to be too low.

EU legislation governing cash accounting for VAT EU Directive 2010/45/EU is designed to create a harmonised framework for VAT

invoicing rules for all Member States. It aims to simplify the invoicing requirements for business and to provide tax administrations with an effective means of ensuring tax is paid.

Cash accounting allows certain categories of businesses to pay VAT to the tax

authority upon receipt of payment for goods or services rather than upon issue of invoices. Cash flow problems can arise for businesses where they must pay

VAT on goods or services before they have themselves received payment for these goods or services.

This EU Directive allows for cash accounting thresholds up to €2 million, which are in operation on 31st December 2012, to remain in place without further

consultation with the EU VAT Committee. The Directive also requires the European Commission, by 31st December 2016,

to present an assessment report to the European Parliament and Council of the European Union based on independent economic study of the impact of these

invoicing rules. This report will include examination of the extent to which the rules have effectively led to a decrease in administrative burdens for businesses.

Changing the rules to benefit SMEs The subgroup met the Department’s tax policy adviser to discuss this

complicated issue and pinpoint where problems may arise. The results of recent surveys carried out by Dublin Chamber of Commerce illustrated the difficulties experienced by businesses trying to maintain revenue and manage cash flow. A

number of problem areas were flagged:

the difference in the length of time between goods or services being supplied (when VAT is payable) and the average time for payments received from invoices;

the recovery of VAT paid on bad debts; companies paying VAT to the Revenue Commissioners before having

received payment themselves from customers. A cash accounting system is currently in place under Irish tax law but the

qualifying turnover criterion is restrictive; annual turnover of the business must not exceed €1 million. There is therefore scope to double the threshold without

exceeding EU limits and without further negotiation at EU level. Such a change should have no impact on the actual full year Exchequer receipts but there would


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be a delay in collection of receipts during the changeover period and associated

costs in funding the gap in revenue arising from this delay.

Recommendations Given the possibility to raise the threshold for cash accounting for VAT, without the need for consultation with the EU VAT Committee, if given effect before the

end of 2012 the subgroup is eager for quick action. Its recommendations may be summarised as follows:

Raise the threshold to €2 million before 31st December 20127.

Index the threshold and increase the base rate in future on the basis of further analysis.

7 The HLG made a pre-Budget submission to the Minister for Finance recommending the threshold

be increased. As part of Budget 2013 the threshold is being raised by 25% to €1.25 million.


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6. Procedures for hiring part-time staff

Chair: Tim Ryan Members: Patricia Callan; Gerard Kiely (ISME) Secretarial Support: Mary Killeen, Don O’Connor

The subgroup investigated the status of casual workers in Ireland and explored

potential changes to existing procedures which could make it easier for employers to hire part-time staff. For employees, employers and the economy as a whole a day of work is obviously better than a day on benefit. The social

welfare system should incentivise employers to take on part-time workers and to increase hours worked when possible; workers should be incentivised to take up

work offered. It is therefore essential to make it as easy as possible for people to take up work and to move in and out of work.

Background There are currently over 430,000 recipients of jobseeker’s allowance and

jobseeker’s benefit including over 80,000 casual workers. In order to qualify for jobseeker’s benefit an individual must be unemployed for three out of six days (moving to seven days from January 2013); any amount of time spent working

on a given day counts as a full day worked so that an individual working for two hours per day for five days will not qualify for payment. This system appears

outdated and in times of mass unemployment part-time employment should be supported as a viable alternative.

There is currently a Part-Time Job Incentive Scheme (PTJI) allowing unemployed individuals to get paid for less than 24 hours’ work per week while receiving a

special allowance of €119 instead of a jobseeker payment. The existing Jobs-Bridge Internship Scheme allows recipients of jobseeker payments to receive €50 in addition to their existing payment while working as interns with

companies registered on the scheme.

Issues with the existing social welfare system There is anecdotal evidence that in some cases when employers have the capacity to increase the number of days worked by an employee the individuals

concerned may not accept the additional work if they are in danger of losing their entitlement to benefits; employees working three days per week may be

reluctant to shift to four days or more per week given the current rules and the potential difficulty of re-registering for benefits should their work pattern be

reduced back to three days. ISME and the SFA currently receive daily phone calls from member businesses about this issue; the existing system does not take account of the reality of a seven day work week and employers’ need for

flexibility.

Employers can also be discouraged from hiring short term employees given the duplicative administration from the Department of Social Protection (DSP) and the Revenue Commissioners when employing someone for even just one day.

Such difficulties are exacerbated by the fact that DSP requirements are often incompatible with existing monthly payroll schedules used by employers.

DSP is clearly continuing to improve its procedures but there are many immediate challenges facing the Department given current levels of


24

unemployment. The Department’s focus is on the long-term unemployed and

those seeking full-time work; the issue of part-time working needs to be carefully considered, particularly given the danger of reliance on a mix of part-

time work and jobseeker payments when full-time work may be available. Recommendations

This is a particularly difficult issue and has been examined in recent years from a variety of perspectives by different groups. The subgroup is mindful of the need

for further detailed consideration of the issues before proceeding with far reaching changes but has identified a number of areas of the current system which may be improved.

The subgroup’s recommendations include the following:

Introduce an hours-based system for calculating entitlement to jobseeker

payments.

Administrative processes need to be modernised by linking Revenue and DSP

system more effectively, introducing more online systems and aligning forms and information requests to employers with existing payroll timelines and

systems.

Improve awareness of existing schemes and entitlements for jobseekers by

outlining these through a targeted information campaign.


25

7. Health & Safety issues

Chair: Frank O’Donnell Members: - Secretarial Support: Don O’Connor

The subgroup was tasked with considering a variety of Health & Safety related issues, many of which were submitted to the HLG with suggestions for possible

solutions. In order to cover all relevant areas the subgroup met with representatives from IBEC, FÁS, the HSA, DJEI’s Health & Safety Policy Unit and the Department of Education and Skills.

Safe Pass validity

The FÁS Safe Pass programme (Health & Safety awareness training) was developed following an initiative by the Construction Industry Training Committee (CITC) which was incorporated into the Construction Safety

Partnership (CSP) Plan. Detailed consultation took place between FÁS and expert working groups representing the social partners with the support of the CITC.

The Safe Pass course is now in its sixth iteration and construction workers must refresh their training every four years; it was suggested to the HLG that the

validity period for Safe Pass should be pushed to ten years and supplemented by an online refresher course. Any suggestion to extend the validity period should

be submitted to the Construction Advisory Group chaired by FÁS which now oversees Safe Pass. However it appears that a good deal of the demand for Safe Pass courses arises from industry itself, with project supervisors insisting that

any workers on site should have completed the course.

Definition of construction The official definition of construction covers a broad range of activities not traditionally seen as construction; this means that Safe Pass and other training

must be completed by those carrying out such activities which in turn increases administrative burdens and raises industry costs. The domestic definition is

contained in the Safety, Health and Welfare at Work (Construction) Regulations 2006 but arises from EU legislation; the definition cannot be altered without changing the legislation at EU level. A review of Health & Safety regulation at EU

level will take place in 2015 and industry will be consulted as part of the review.

Provision of training and recognition of EU qualifications When this issue was first raised with the HLG it was claimed that construction

training can only be completed in Ireland through FÁS and that this constitutes a training burden delaying work and adding costs to employers; the submission suggested allowing recognition of equivalent qualifications from other Member

States. FÁS is the regulator of construction training but external providers and construction companies can provide training using in-house tutors who are

accredited by FÁS. Ireland has a mutual recognition agreement with the UK covering Health &

Safety awareness training courses such as Safe Pass. Such programmes are however not typically available in other Member States. The option to convert

Safe Pass to a qualification (rather than an awareness programme) and so align it with more common EU qualifications has been considered but may entail disadvantages for some construction workers.


26

Workstation risk assessments The original suggestion to the HLG contended that modern office furniture is

designed to comply with the minimum provisions of the legislation and that purchase records of compliant furniture should therefore be sufficient, in conjunction with a generic Health & Safety assessment, to show compliance with

requirements to carry out time consuming risk assessments at each workstation. Council Directive 90/270/EEC on the minimum safety and health requirements

for work with display screen equipment is very clear, however, that it is the employer’s responsibility to carry out an individual risk assessment for each workstation, particularly as regards possible risks to eyesight, physical problems

and problems of mental stress.

Eyesight tests Council Directive 90/270/EEC entitles workers to appropriate and regular eyesight tests when working with display screens; the cost of these tests falls to

employers. The administration around a display screen equipment eyesight testing regime can be considerable, particularly for SMEs. Under the existing

PRSI Treatment Benefit Scheme (Optical) qualified individuals are entitled to a free eyesight test but these tests do not cover sight tests related to work with display screens.

Research, Technology and Innovation Fund drawdown process

Although not a Health & Safety issue the subgroup also looked at the drawdown process for Enterprise Ireland’s Research, Technology and Innovation (RTI) Fund. The submission to the HLG cited an excessive administrative burden

placed on applicants due to requirements for multiple audits when applying for RTI funding. Changes were introduced to the process in January 2011 and

automatic submission of an accountant’s reports is no longer required when the funding is less than €250,000 and is being granted to an SME.

Recommendations Investigation of the issues discussed above resulted in clarifications which have

resolved all of the issues except eyesight testing for workers using display screen equipment.

The subgroup’s main recommendation may be summarised as follows:

Free eyesight tests covered by PRSI should include tests related to use of display screen equipment.


27

8. Licensing for business

Chair: Tara Buckley Members: Tim Ryan Secretarial Support: Don O’Connor

The subgroup was tasked with examining a number of different licences affecting business; it began its work by looking at existing Government commitments on

licensing reform and by meeting with relevant agencies such as Fáilte Ireland and Forfás. In addition to specific licensing requirements the subgroup looked at related areas that could improve the business environment significantly, such as

the introduction of a one-stop-shop for licensing and inspection and the development of a Unique Business Identifier. The subgroup also discussed

development of general principles which could be applied across all licensing regimes.

The subgroup suspended its work pending publication of an extensive study on licences commissioned by Forfás. The review, Licensing Burden on Enterprise,

was published in December 2012. In its report, Forfás put forward a number of recommendations to simplify the number of licences a business needs to obtain.

The Key Findings & Conclusions of the Review

The overall conclusion from the review of licences is that there is potential to: Amalgamate up to 20 sectoral licences; and Reduce licencing processes and the burden on enterprises by up to one third.

The key recommendation from the review is for the relevant licensing authorities

to proceed towards development of integrated licensing systems for retail, food and drink, hospitality and leisure and construction sectors to rationalise the number of licences and to streamline processes so as to reduce the overall

administrative burden on business.

The review concluded that licencing in general is recognised as essential by business, but that the burden of many licences is unnecessarily high. Industry would welcome any initiative to reduce the regulatory burden. It was found that

reducing the administrative burden in the key sectors may not necessarily require discontinuation of licences but rather a streamlining and improvement of

licencing processes.

Licence burdens for enterprises comprise a combination of licence fee costs, such as once-off application fees and annual renewal fees or charges, non-fee costs such as legal, consultancy or advertising fees, and time burden of the

business’ own staff time in applying for, renewing and complying with licences. In certain sectors, such as retail and hospitality, and in the case of SMEs

especially, the multiplicity of licences imposes a significant burden.


28

This review concluded that:

there is potential to effectively amalgamate a number of sectoral licences through a single integrated licensing system, particularly in the retail sector

and for the construction and food and drink sectors8; to improve the way licences are processed and issued, such as for Integrated

Pollution Prevention Control (IPPC) licensing for the manufacturing sector; to extend the renewal frequency of licences to reduce the burden on

businesses while maintaining the regulatory objective of the licences in question, for example electrical contractors or public house licences;

licensing processes and requirements need to be subject to regular process

audit and review to increase efficiencies and reduce the burdens of processes on business; and

relevant licensing authorities in retail and food need to proceed towards development of integrated licensing systems to rationalise the number of licences and streamline processes so as to reduce the overall administrative

burden on businesses.

Next Steps The development of an integrated licensing application portal for the retail sector, in the first instance, has been included as a Disruptive Reform in the

Action Plan for Jobs 2013, to be delivered by the end of the year.

8 The DJEI web portal www.businessregulation.ie is a good start at providing a comprehensive list of licences

for business and can be further extended so that businesses are clear on their licensing requirements.

http://www.businessregulation.ie/


29

Action Plan for Jobs 2013 - Headline Recommendations

Based on discussion of the subgroup reports summarised above the High Level Group has decided to suggest the following recommendations for inclusion in the

Action Plan for Jobs 2013: 1. Late Payment

Building on a commitment in the Action Plan for Jobs 2012 and the work of the Advisory Group on Small Business, a Prompt Payment Code of Practice

for business should be introduced.

Once the Code is completed an information campaign should be launched to introduce it to business and to make SMEs in particular aware of legislation

governing 30 day payment rules.

2. Audit Exemption Thresholds

The Department of Jobs, Enterprise and Innovation will examine the suggestion to allow companies to avail of audit exemption when two of the three criteria are met rather than requiring companies to meet all three

criteria.

3. Regulatory Impact Analysis

Resources from the Irish Government Economic and Evaluation Service should be made available to facilitate preparation of improved RIAs.

The progress of RIAs, on domestic and EU proposals, should be tracked centrally and published as part of the legislation programme available on

the Oireachtas website.

4. Nursing Home Registration

Where nursing home operators have already established the accuracy of certain information and it cannot change the original proof should be

accepted as still valid when renewing their registration with HIQA.

Where operators have already established the accuracy of certain information and it has not changed it should be possible to make a declaration to this effect and have the original proof accepted as still valid.

An online system allowing for completion of registration and renewal of

registration electronically should be developed in the long-term.

HIQA should consider generating more guidance for nursing home operators on compliance with relevant regulations and related standards; HIQA should

also consider working with other relevant bodies on guidance on overlapping standards and other regulatory requirements.


30

Cross-Government Project to Measure and Reduce

Administrative Burdens In 2007 the European Commission launched its Action Programme on Administrative Burdens and set itself the goal of reducing administrative burdens

on business arising from EU legislation by 25% by the end 2012. The European Council subsequently invited all Member States to adopt targets of comparable ambition and in March 2008 the Irish Government took up this challenge by

setting its own target of a 25% reduction of administrative burdens on business by the end of 2012.

The Department of Jobs, Enterprise and Innovation and the Central Statistics Office began measuring their administrative burdens on business during 2008-

2010. HLG members provided valuable assistance to the Department in workshops held in 2009 and 2010 to identify potential burden simplifications.

Since September 2011 the Department’s Business Regulation Unit has been coordinating a cross-Government project to measure and reduce administrative

burdens involving seven Government Departments and Revenue; the High Level Group has provided an avenue to collect feedback from business throughout the

project. HLG members attended meetings with senior officials during the measurement exercise to validate results and all Departments measuring and reducing administrative burdens have presented or will in due course present

their final results to the HLG.

The measurement project found an overall administrative burden on business of over €1.5 billion per year in the base year of the measurement; achieving a 25% reduction is a serious prize for the economy with substantial potential benefits if

business is freed of over €375 million of annual costs.

9

9 This total relates to the burden arising from domestic legislation.

833

9

267

4

2 223

112

94

6

Total Administrative Burden on Irish Business 2008

Share of burden per Department (€ million)

Jobs, Enterprise & Innovation

Central Statistics Office

Revenue (excluding VAT)

Social Protection

Communications, Energy &

Natural Resources

Environment, Community &

Local Government

Transport, Tourism & Sport

Agriculture, Food & the Marine

Health

Total burden: €1.55 billion


31

Prioritisation

International experience tells us that 90% of administrative burdens derive from fewer than 5% of the administrative requirements in regulation. In order to save

costs and increase efficiency the Irish approach to conducting the baseline measurement has therefore been to identify this 5% before measuring.

A multi-stage prioritisation process was carried out during 2010 across all Departments with a view to identifying the most burdensome regulation

affecting business. This consisted of identifying specific regulations or Information Obligations (IOs), estimating relevant frequencies and population figures and then seeking validation with business organisations. This process

ultimately identified just over 200 IOs which were taken to represent 90% of all administrative burdens on business arising from the legislation for which eight

Departments and the Revenue Commissioners have responsibility. In July 2011 the Government decided that a cross-Departmental project should

be carried out to measure the administrative burdens on business arising from regulation under the responsibility of the Revenue Commissioners and the

remaining Departments:

Communications, Energy & Natural Resources (DCENR)

Social Protection (DSP) Public Expenditure & Reform10 (DPER)

Agriculture, Food & the Marine (DAFM) Environment, Community & Local Government (DECLG) Health

Transport, Tourism & Sport (DTTS)

Work on the measurement of burdens began in September 2011 with the first cluster of participants (Revenue, DCENR, DSP); the measurement of the IOs for the second cluster (DAFM, DECLG, Health, DTTS) began in January 2012. A total

of 160 IOs had been identified for measurement by the participating Departments.

Approach

The project combined a centralised, coordinated approach from the Business Regulation Unit with consultancy expertise. The advantages of this included: consistent output, lower cost to the Exchequer, embedding of skills and

competencies in the participating Departments and direct engagement in the process of measurement leading to easier identification of the most cost

effective simplifications. The BRU supported and coordinated the process by managing the relationship between the Departments and the consultants; where necessary the BRU also provided operational support to Departments.

Baseline The baseline measurement of administrative burdens was based on the legislation in effect on 31 December 2008; the reduction target of 25% is

therefore measured against the burden of the legislation at this time. By determining the administrative burden for 2008 and the changes in the relevant

10 Responsibility for Department of Public Expenditure and Reform IOs on public procurement was

transferred from the Department of Finance upon its establishment.


32

Information Obligations that have occurred up to 2011 the burden for 2011 is

also determined. All changes between 2008 and 2011 were measured; it was therefore possible that burden increases would be identified. The agreed

international methodology for measuring administrative burdens is the Standard Cost Model11 (SCM), developed in the Netherlands, and now used by the European Commission and all Member States.

Measurement

Staff in each participating Department, working under the guidance of expert consultants, set about measuring the Information Obligations for their Department. This involves careful mapping of all of the specific administrative

activities (e.g. form filling, information retrieval) required to comply with a particular IO; consultation with Departmental officials directly responsible for

each IO ensures no relevant steps are omitted. Once the IO has been mapped a number of business interviews are conducted for each IO to establish the ‘standard’ length of time it takes a typical business to carry out the

administrative activities necessary for compliance. Once a standard time is worked out this is multiplied by the relevant hourly labour cost for the employee

typically carrying out the work to produce the administrative cost of complying with the IO. Additional costs, such as accountant fees, are also included in the measurement as are overheads. The cost of complying with each IO is then

multiplied by the relevant number of annual events (arrived at using population and frequency e.g. submission of two forms each year by 15,000 companies

would result in 30,000 events); this process results in an overall cost to the economy resulting from the administrative burden associated with complying with a given IO.

Measurement is not an end in itself; it is a tool for change, whereby each

Department will know the red tape cost it imposes on business via regulation under its responsibility. While quantification is a key driver of progress, the emphasis of the project is ultimately on how the results of the measurement will

be used to identify the best practical ideas for reducing burdens on business. Once the measurement is complete each Department must produce a

Simplification Plan setting out how they intend to meet the 25% reduction target and in what timeframe. Business and union representatives, including the High

Level Group, have been used throughout the measurement process to validate results.

11 The SCM involves a detailed step-by-step process to first map the underlying activities that

businesses have to carry out when complying with a particular IO and then to use interviews with businesses and experts to place a time and money value on these activities For more information on the Standard Cost Model please see the relevant BRU pages on djei.ie:

www.djei.ie/commerce/businessregulation/index.htm

http://www.djei.ie/commerce/businessregulation/index.htm


33

Departmental results

Revenue Commissioners Revenue reported a total 2008 administrative burden on business of €267.4 million arising from 62 prioritised Information Obligations covering Employers’

PAYE, Relevant Contracts Tax, Income Tax, Corporation Tax, Audits, Tax Registration and Tax Clearance; a further burden of €268.5 million was identified

in respect of VAT12. Revenue presented the results of its measurement exercise to the High Level Group in September 2012. The measured burden in 2012 was €200.8 million exclusive of VAT and €249.6 million for VAT. This equates to an

annual administrative burden reduction of €66.6 million or 25% for the areas measured exclusive of VAT (and a reduction of €18.9 million or 7% for VAT).

The main initiatives which led to the 25% burden reduction included:

Reduced filing frequencies for VAT, Employers' PAYE/PRSI and Relevant Contracts Tax;

Pre-population of income tax and corporation tax forms; Revenue's new electronic Relevant Contracts Tax system; Ongoing expansion and improvement to the range of electronic services

on ROS.

Recognising that the burden on businesses can be exacerbated by complex legislation and regulation, Revenue has also undertaken an extensive

programme to systematically consolidate and streamline older tax and customs legislation including stamp duty, capital acquisitions tax and VAT legislation. The full report on Revenue’s measurement exercise and burden reductions can be

found on Revenue’s website13.

Communications, Energy and Natural Resources DCENR reported a total 2008 administrative burden on business of €2.2 million

arising from 12 IOs (mainly in the areas of gas and electricity operating licences and mining and petroleum exploration). The total burden for 2012 remains

unchanged at €2.2 million. Compared to other areas of regulation DCENR’s legislation impacts directly on a small number of businesses (approximately 200 excluding fisheries); although no burden reduction was recorded between 2008

and 2012 the Department is pursuing a range of measures to improve its interaction with business. DCENR intends to undertake further work on the scope

for reducing administrative burdens with its three regulatory agencies: the Commission for Energy Regulation, the Commission for Communications Regulation and the Broadcasting Authority of Ireland. Social Protection

The Department of Social Protection reported a total administrative burden on business in the base year of €4.2 million arising from 11 IOs and this remains the same in 2012. DSP’s interaction with businesses is primarily through the

provision of information by employers in respect of the applications of

12 The majority of VAT Regulation arises at EU level and Revenue, in common with tax authorities

in other Member States, has limited scope for further reduction of the administrative burden associated with VAT. The parallel administrative burden project at EU level aims to reduce the administrative burden on business associated with VAT. 13 www.revenue.ie/en/about/publications/administrative-burden-reduction-business.pdf

http://www.revenue.ie/en/about/publications/administrative-burden-reduction-business.pdf


34

employees and former employees for a benefit or allowance scheme

administered by the Department. The provision of up-to-date information by employers is essential to ensure that applications for Departmental schemes are

processed in accordance with the relevant scheme qualifying conditions and to ensure that fraud and abuse of the social welfare system is minimised. While there was no reduction in DSP’s measured burden between 2008 and 2012 the

Department is undertaking a range of activities that will reduce other administrative burdens on business.

Under the Public Service Reform Plan the Department is committed to producing a detailed eGovernment Strategy in 2012. This will outline how the Department

will build on the electronic services and data sharing processes already in place to reduce the administrative burden on all customers including businesses. It will

also reflect the service delivery modernisation programme underway in the Department which will continue to focus on using modern technology in an innovative way to maximise efficiency and effectiveness in the use of resources.

Through collaboration with other agencies the Department will ensure that data sharing takes place when possible to reduce the number of times that the citizen

or business will be asked for data. The delivery of seamless services across online channels and mobile technologies will be supported by:

the development of a new corporate website commencing 2012; through leveraging efficiencies gained from the rollout of the Public

Services Card (PSC) and provision of shared identity services; through the integration and development of the new entitlement and

employment service.

The full report on DSP’s measurement exercise can be downloaded from the

Department’s website14. Agriculture, Food and the Marine

DAFM reported a total administrative burden on business in 2008 of €94.2 million arising from three IOs (Identification and Movement of Bovines, the

Single Payment Scheme for farmers and Felling Licence Applications). The total burden as of 2012 is €86.5 million; the Department has therefore achieved a

reduction of €7.7 million or 8.2% since the base year. The Department intends to liaise with stakeholders on an ongoing basis to identify process improvements. DAFM believes that the continued promotion of online

applications will reduce administrative burden for clients. The potential benefits for customers include faster processing in SPS, fewer errors in all schemes due

to inbuilt validations and easier record keeping for agents. These effects could not all be captured and quantified during this project.

Environment, Community and Local Government DECLG reported a total administrative burden in the base year of €223.3 million

arising from 39 IOs, notably in the areas of waste management, planning permission and building regulation. Although DECLG has introduced measures to reduce the administrative burden in the interim, the total burden measured for

2012 remains at €223.3 million. DECLG is, however, committed to seeking ways to reduce duplication or inefficiency of information flow, and to modernising and

14jwww.welfare.ie/EN/Policy/CorporatePublications/StrategicPlansAndReports/Documents/ABmeasu

rementDSP2012.pdf

http://www.welfare.ie/EN/Policy/CorporatePublications/StrategicPlansAndReports/Documents/ABmeasurementDSP2012.pdf

http://www.welfare.ie/EN/Policy/CorporatePublications/StrategicPlansAndReports/Documents/ABmeasurementDSP2012.pdf


35

streamlining processes wherever feasible, in such a way as to reduce

unnecessary administrative costs that may arise both for business and for the public sector. Fully consistent with the approach set out by Government in

relation to the 25% reduction target, this must be done in a way that will not undermine the policy goals of the regulations in question or diminish in any way the protections afforded by these regulations. Health

The Department of Health reported a total administrative burden in the base year of €6.2 million arising from seven IOs in the areas of private nursing home registration and inspection, pharmacy registration and record keeping, and

notification of food business establishments. The total burden in 2012 remains unchanged at €6.2 million. The legislation associated with the burden arises in

the main for the purpose of ensuring patient safety. In respect of nursing homes the legislation was only introduced in 2009 in response to grave concerns for the safety and welfare of residents following certain well publicised incidents and

involves a three year registration cycle which has only just been completed. Reductions in resultant burdens are projected as the new regulations are bedded

down in subsequent cycles. The Department plans to address certain reduction proposals identified during the measurement exercise and will continue to liaise with stakeholders on an ongoing basis to identify further potential burden

reduction measures.

Transport, Tourism and Sport DTTS reported a total administrative burden in the base year of €112 million arising from six IOs, notably in the areas of vehicle testing, tachographs and

vehicle operator licensing. The total burden in 2012 is calculated as €108 million; the Department has therefore estimated a reduction of €4 million or

3.74% since 2008. This reduction is based on savings arising from the switch from analogue to digital tachographs which commenced in 2006 and will be 50% complete at end 2012. DTTS has plans to further reduce its administrative

burden on business to reach an overall reduction of 28.9% by June 2013. The planned further reductions will include making application of present

roadworthiness certificates and vehicle taxation available online, a new simplified online system for vehicle operator licensing and continuing the switch from

analogue to digital tachographs. Central Statistics Office

The CSO reported a total administrative burden on business in 2008 of almost €8.7 million arising from its business surveys. The total burden in 2011 was €6

million; the CSO has achieved a reduction of over €2.6 million or 30.1%. In 2008 the CSO identified the minimising of response burdens on CSO inquiry respondents as a corporate priority. Since then the CSO has taken a number of

actions including increasing the use of electronic reporting methods, adopting better sampling techniques and making greater statistical use of administrative

records. Cooperation with Revenue to improve the quality and timeliness of trade data collected by Revenue on behalf of the CSO has reduced duplication in data submission from businesses. The CSO publishes an annual Response

Burden Barometer; the report on 2011 is the latest available on the CSO’s website15. A 2010 report on the Standard Cost Model measurement of

15jwww.cso.ie/en/media/csoie/releasespublications/documents/multisectoral/2011/responseburden

11.pdf

http://www.cso.ie/en/media/csoie/releasespublications/documents/multisectoral/2011/responseburden11.pdf

http://www.cso.ie/en/media/csoie/releasespublications/documents/multisectoral/2011/responseburden11.pdf


36

administrative burden imposed on Irish Business by CSO Inquiries is also

available on the CSO’s website16.

Jobs, Enterprise and Innovation DJEI measured administrative burdens on business in three key areas of regulation (Company Law, Employment Law and Health & Safety Law) prior to

commencement of the cross-Government project. It was found that the burden across these three areas amounted to some €833 million per annum for

business. The Government’s 25% reduction target dictates that no less than €208 million must be cut from these measured costs. As of November 2012 the Department has achieved a reduction of 24.92% amounting to approximately

€207.7 million of business savings each year.

Substantial savings have been achieved thanks to improved online systems and development of innovative tools; details of these simplifications can be found on the BRU’s pages on djei.ie17 but two examples are described below.

Companies are required to submit annual returns and accounts to the

Companies Registration Office (CRO) every year resulting in a 2008 administrative burden on business of over €35 million. The CRO’s online CORE system now allows companies to submit returns electronically, resulting in an

annual burden reduction of €29 million.

The Safety, Health and Welfare at Work Act 2005 requires all businesses to carry out a workplace risk assessment and to develop a safety statement. The Health and Safety Authority’s (HSA) Taking Care of Business initiative aims to help

small business owners and managers to understand how effective management of workplace and worker health and safety can benefit the bottom line; a key

part of this initiative has been the HSA’s development of BeSMART, an online risk assessment and safety statement tool. BeSMART is free and simple to use; it assists small businesses to identify workplace hazards and generate tailored

risk assessments and safety statements as required by law. Over 140 types of risk assessment have been developed for a vast array of small business types

including the retail, manufacturing and services sectors. The requirement to carry out time consuming risk assessment and draft safety statements resulted

in a base year administrative burden of almost €235 million but BeSMART has reduced this burden by €60 million annually, with plans to further extend the sectors covered by the tool in future.

16 www.cso.ie/en/media/csoie/releasespublications/documents/otherreleases/stdcostmodrep.pdf 17 www.djei.ie/commerce/businessregulation/about.htm

http://www.cso.ie/en/media/csoie/releasespublications/documents/otherreleases/stdcostmodrep.pdf

http://www.djei.ie/commerce/businessregulation/about.htm


37

Overall results

The total administrative burden on business imposed by the above seven Departments, the CSO and Revenue amounted to €1.55 billion in 2008. As of

November 2012 an estimated overall reduction of €289 million or 18.6% has been achieved. All participating Departments are expected to build on the knowledge gained during the project to further reduce administrative burdens on

business. The expertise built up within Departments can also be used to consider the potential cost implications of Information Obligations when drafting new

regulation.

0

400

800

1,200

1,600

2008 2012

1,550

1,262

Administrative Burden Totals

€ million


38

Communicating with Business – businessregulation.ie

The issue of effective communication with business has been repeatedly raised at meetings of the High Level Group, while the Department also hears from

business through other channels of the difficulty in accessing adequate information on regulation. The BRU, in cooperation with the HLG, began work in

2011 on addressing the need for an information source on core regulatory obligations. Launch of a single web portal for business compliance information was also included as an action in the Action Plan for Jobs 2012. Work on this

action culminated in the launch of the web portal businessregulation.ie in June 2012.

The purpose of businessregulation.ie is to help business, especially SMEs, identify the main regulations which affect their activities, to assist them in

navigating through the complex regulatory landscape and to provide a centralised place for links to the relevant agencies and their guidance, tools and

contact points. Development

The BRU organised focus groups in July 2011 to investigate whether a new web portal could act as a useful source for business information on core regulations

and the best format for such a portal. In order to ensure a mix of relevant views were heard a variety of stakeholders were asked to take part in the focus groups, with some participants sourced from HLG member organisations such as

IBEC and Chambers Ireland. The focus groups ultimately included business representative associations, individual companies and Wicklow County Enterprise

Board. The goal of the focus groups was to hear directly from business about the

difficulties they encounter when trying to access business regulation information. A number of targeted questions were put to all participants and issues were

teased out further by the facilitators. Issues covered included:

identification of information that was not easily accessible at present

use made of existing web resources with information on business regulation

what content could make a new web resource most effective design preferences to ensure a user friendly web resource

The focus group participants engaged fully with the process and offered a range of opinions on all of the issues discussed. As the focus groups clearly supported

the idea of a new web portal for regulatory information the BRU proceeded with development of businessregulation.ie. The feedback from the focus groups

provided guidance in a number of areas but to ensure development of an informative resource that meets the needs of business the BRU worked closely with a range of regulatory bodies and consulted the HLG throughout the project.

A key point often made throughout the development was that the portal should focus on business regulation specifically, rather than trying to cover other broad

areas comprehensively.


39

As the Department was simultaneously creating a new web presence at

enterprise.gov.ie costs were minimised and a consistent corporate identity promoted by using the same web developers for businessregulation.ie.

Content Businessregulation.ie contains three principal sections covering information for

start-ups, key regulation for all businesses and sector-specific information. The site has a relatively simple design with a home page that clearly shows the

structure of the content. The focus groups felt strongly that the home page should have limited imagery and that the whole page should be visible without excessive scrolling; the BRU worked closely with the web developers to ensure

the portal’s design enhances the content by making it very accessible.

For start-up businesses the portal contains links to information on registering a company or business name, setting up for tax purposes and requirements when

employing staff. Under Key Regulations for all Businesses the portal provides links on financial and structural regulation, employer and Health & Safety

requirements and location-based regulation such as waste or planning. Where appropriate the portal points to specific tools such as Revenue’s Online Service ROS and the Health and Safety Authority’s BeSMART, which helps businesses to

quickly and easily develop their own risk assessment and safety statement. A


40

range of sector-specific information, which will be expanded as necessary,

includes sections on agriculture and forestry, food, fisheries, construction, retail, e-selling, transport, hospitality, security, pharmacy and manufacturing.

Businessregulation.ie does not restate information available elsewhere as regulatory information is best explained by the relevant agency. The portal

brings users quickly and directly to the exact source of the information they need. For example under Key Financial and Structural Regulations (see below)

the portal takes users directly where they need to go from the Companies Registration Office’s guidance on annual returns to Revenue’s online services such as ROS.

The portal includes over 150 separate links to information from over 30

Government bodies; it reduces the need to trawl though multiple pages on different websites in search of the right information. The homepage also offers lists of supports for business, contact details for the main Departments and

agencies covered and how to get news and updates provided by agencies.

Launch and awareness raising The Minister for Jobs, Enterprise and Innovation launched businessregulation.ie along with the Minister for Small Business and members of the HLG in June

2012. The portal was launched ahead of the schedule set out in the Action Plan for Jobs (Q3 2012). The Department issued a press release and the launch was

carried widely online and in national print media. Since the official launch the BRU has been running an information campaign to

raise awareness of the portal among businesses, particularly SMEs. Business association members of the HLG have been asked to promote the portal to their

membership. In addition the BRU has been pursuing regulatory agencies, bodies providing supports to business and Local Authorities to make businesses on the ground aware of the portal.

The BRU has also begun attending small business events to promote the portal

directly and recently attended a Health and Safety Authority ‘Taking Care of Business’ event and an InterTradeIreland ‘Meet the Buyer’ event on


41

procurement. These events also allow for the gathering of feedback on the portal

so that its content can be improved and expanded.

Minister Bruton, Minister Perry and members of the HLG launching businessregulation.ie

From its launch in June 2012 until the end of December the portal has had almost 50,000 pageviews from more than 8,900 unique visitors.

Businessregulation.ie is clearly being used by business but it needs to be promoted on a continuous basis.


42

Appendices


43

1. 2012 Membership John Perry TD (Chair) - Minister for Small Business

Tara Buckley - Director General, RGDATA

Patricia Callan - Director, Small Firms Association (SFA)

Jim Copeland - Chief Executive, Irish Hardware and Building Materials Association

(IHBMA)

Marie Daly - Head of Legal and Regulatory Affairs, Irish Business and Employers’

Confederation (IBEC)

Garrett Fennell - Managing Director, GFC Consulting

Mark Fielding - Chief Executive Officer, Irish Small and Medium Enterprises (ISME)

Bernadine Gormley – Director, Association of Chartered Certified Accountants (ACCA)

Gerry Harrahill - Collector General, Revenue Commissioners

Declan Hughes - Manager, Competitiveness Division, Forfás

Neil Keenan - Member of Business Law Committee, Law Society of Ireland

Esther Lynch - Legal and Social Affairs Officer, Irish Congress of Trade Unions (ICTU)

Steve MacFeely - Director, Business Statistics, Central Statistics Office (CSO)

John McCarthy - Assistant Secretary, Department of Environment, Community and

Local Government

Ronan Gallagher - Principal Officer, Department of Public Expenditure and Reform

David O’Connor - Fingal County Manager, County and City Managers’ Association

(CCMA)

Frank O’Donnell - Director, Print Depot

James O'Sullivan - Director, M&P O’Sullivan Cash & Carry

Breda Power - Assistant Secretary, Department of Jobs, Enterprise and Innovation

Tim Ryan - Founder, Tim Ryan Communications

Ian Talbot - Chief Executive, Chambers Ireland


44

2. Terms of Reference

The Terms of Reference of the High Level Group on Business Regulation are as follows:

1 To identify the administrative burdens placed on businesses, in particular small

and medium sized enterprises, arising from Regulation or other administrative requirements, particularly in the areas of taxation; health and safety regulation; employment law; environmental regulations; company law and statistical

returns;

2 to determine ways to reduce and simplify administrative burdens and to eliminate them where they are unnecessary;

3 in cooperation with Government Departments, Agencies and Users, as appropriate, to measure the cost savings of the administrative burdens in the

areas identified; 4 to act as a ‘clearing house’ in addressing obstacles to the reduction of

administrative burdens and associated costs; and

5 to report initially to Government before end July 2008.


45

3. Sub-Group Reports

NOTE:

THE VIEWS EXPRESSED IN THE REPORTS BELOW

ARE THOSE OF THE SUB-GROUPS AND DO NOT

NECESSARILY REFLECT THOSE OF THE HIGH

LEVEL GROUP AS A WHOLE.

IN SOME INSTANCES, THE VIEWS PRESENTED

REQUIRE FURTHER CONSULTATION WITH

RELEVANT GOVERNMENT DEPARTMENTS FOR A

DETAILED ANALYSIS OF THE SUBSTANCE OF THE

ISSUES AND TO DETERMINE THE EXTENT TO

WHICH THE RECOMMENDATIONS CAN BE

PROGRESSED.

1. Regulatory Impact Analysis Report

Chair: Marie Daly, IBEC

Introduction

The focus of the Subcommittee was on considering how regulatory burdens could be reduced through the systemic use of Regulatory Impact Analyses (RIA) to reduce unnecessary regulatory burdens on business. The Subcommittee

believes that unnecessary regulatory burdens hinder competitiveness, add to business costs and ultimately reduce employment retention and creation. They

also constitute a wasteful use of public resources given that laws, policies and regulations tend to be introduced which impose the additional burdens, costs and restrictions, which the system then has to deconstruct after the event.

In terms of briefing our group we considered existing Government commitments

on RIA (in the Programme for Government and the Action Plan for Jobs 2012) and also European developments on the subject. We reviewed the answers to recent Parliamentary Questions on the implementation of RIA within individual

Government Departments which gave an up to date view of activity levels across Departments. We met with Tom Ferris, an expert on RIA and formerly of the

Department of Transport, and also met with Robert Watt, Secretary General of the Department of Public Expenditure and Reform, whose Department has now been tasked with “training and advice to Departments in their conduct of RIAs”

and coordination “with other Departments to ensure that appropriate supports remain in place” (Minister Howlin, PQ 23588/12). We understand there has been

a Government Decision on the assignment of responsibility for the Better Regulation agenda, however this Decision has not been available to the

Subcommittee. The commitments in the Programme for Government make it clear that the RIA

system is important as a quality sifting or proofing mechanism for proposed legislation. It has benefits to both the public and business sectors; for the public

sector it has the potential to enhance the quality of decision making and cut down on unnecessary administrative burdens and the resultant inefficiencies generated; for business, RIAs offer more credibility to legislation by ensuring

costs and alternatives are examined.

RIAs form part of the Cabinet Handbook and all significant regulatory legislative proposals to Government must now be accompanied by a RIA. Overall Regulatory Impact Analysis in Ireland is on the cusp of moving from its

developmental to a more mature stage. As such it is at a critical juncture where expertise and expectations have been established and the quality and usefulness

of RIAs, while patchy, has been maturing. However the Better Regulation Unit of the Department of the Taoiseach, which had responsibility for the development of RIAs, has been disbanded and there appears to be a

responsibility vacuum in its wake.


47

Observations

The replies to recent PQs on RIA indicate that there is a patchy approach to the

commissioning and quality of RIAs – please see the attached annex. The results indicate that in many instances Departments are not carrying out RIAs or are

producing them at a late stage in the policy and legislative process to justify decisions already taken. This is a complete misapplication of the RIA process and the preparation and publication of these post facto RIAs amounts to a waste of

resources and personnel; RIAs are meant to guide policy development and not be a tool to justify policy and legislative decisions.

There are issues in terms of the quality of RIAs however the bigger problem

appears to be the lack of centralised oversight without the continued involvement of the Department of the Taoiseach. The buy in by the Department of Public Expenditure and Reform seems limited, driven, it appears, by a focus

on a broad range of significant challenges (public sector reform, expenditure reductions, sale of State Assets, engagement with the Troika, etc.) which has

meant that there is neither the resources nor spare capacity available to delegate to a renewed focus on RIA. Given that this is the Department with most of the original RIA expertise and charged by Government with a central

oversight role, if the overall Departmental focus on RIAs remains as is, it is difficult to see how RIAs can progress. The Departmental approach is also

regrettable as the expertise on evaluation which resides in the Department of Public Expenditure and Reform and hence the ability to enhance and promote RIAs as a useful evaluation instrument is lost.

Recommendations of the Subcommittee

We make the following individual recommendations against the above backdrop:

1. Given the focus on jobs, enterprise, and competitiveness, the existing

scarce resources available in the public sector should be prioritised to

facilitate the preparation of RIAs at an early stage for legislation and policies that have a specific business impact. As the line Department with

responsibility in this area, it is important that the Department of Jobs, Enterprise and Innovation take a lead role in this area, both in terms of providing guidelines to other Departments and Agencies on measuring

business impacts and of monitoring the preparation and effectiveness of RIAs in this area. If the Department which has responsibility for

competition, employment and enterprise is not in the driving seat in measuring the incidence and effectiveness of regulatory impacts as they apply to business, then no other Department will take responsibility for

this area. Robert Watt indicated that economic expertise would be available from the new economic service to assist the Department in this

process.

2. Given Minister Howlin’s PQ response (23588/12) it appears that

responsibility for Better Regulation in general and RIA specifically has been fragmented between a number of Departments including the

Departments of Communications, Energy and Natural Resources, Public


48

Expenditure and Reform and Jobs, Enterprise and Innovation; a formal

structure for regular and authoritative interaction between all relevant Departments will be necessary.

3. On a broader basis there is a need for a centralised register of or location

for RIAs which will chart not just the fact of their being done but also give

details as to when in the legislative process they were undertaken and if and when they have been published. We believe a good place to do this is

the Government’s legislation programme on the Oireachtas website. This will have the effect of raising awareness of RIA throughout the legislative system and facilitating prioritisation of RIAs by business impact.

4. Government Departments regularly update a database maintained by the

Department of the Taoiseach which tracks the transposition of all EU directives; given that RIAs are obligatory for transposition, it would enhance transparency if a field were added to this database charting RIA

progress.

5. The European Commission is currently driving the Smart and Better Regulation agenda as part of its growth plan for Europe; Impact Assessments form part of this agenda. Most Member States prioritise the

better regulation agenda during their EU Presidency. The Irish Presidency in 2013 is an opportunity to show Irish commitment to this agenda. Given

the focus on driving growth and competitiveness we could at least host the traditional conference of the EU Directors and Experts of Better Regulation Group in advance of the Presidency. This would help show the

benefits of RIA and the resultant lessening of administrative burdens as part of the economic recovery programme. It would also give an

opportunity for the Department of Jobs, Enterprise and Innovation to showcase its work on administrative burden reduction.

6. There has been a development of regulatory expertise within Government Departments with earlier RIA training and the Diploma in Regulatory

Governance – this needs to be tracked and monitored to see the extent to which this expertise can be made available across the public sector to

ensure that best practice in the preparation of RIAs is maintained. We believe that fulfilling this commitment needs active encouragement and will help improve the ability and expertise of those conducting economic

and legislative evaluations. Where possible each Department should tap its existing expertise on RIA.

7. The RIA Guidelines on how to conduct a RIA are very useful and were last

revised in 2009. While not clear which Department will take ownership of

them going forward, we believe it is crucial that they are supported and revised where necessary and that responsibility for same is clear and

visible. Marie Daly

Garrett Fennell Frank O’Donnell

11th June 2012


49

Background

Existing Government commitments to RIA 2011-2012

Programme for Government 2011 Supporting SMEs

We will require Departments to publish Regulatory Impact Assessments (RIAs) before Government decisions are taken, thereby offering a further channel to obtain the views of civil society on new rules and regulations.

The National Parliament and the European Union

Transposing EU Legislative Measures The situation can no longer be tolerated where Irish Ministers enact EU legislation by statutory instrument. The checks and balances of

parliamentary democracy are by-passed. The parliamentary treatment accorded home-produced draft legislation must be extended to draft

legislation initiated within the EU institutions.

The Regulatory Impact Assessments prepared for Ministers on all EU Directives and significant Regulations will be forwarded automatically to the relevant sectoral Oireachtas Committees. These Committees should

advise the Minister and the Joint Committee on European Affairs as to whether the transposition should take place by Statutory Instrument or by

primary legislation. Where primary legislation is recommended the full Oireachtas plenary process should be followed.

Open Government We will require Departments to carry out and publish Regulatory Impact

Assessments (RIAs) before Government decisions are taken. Action Plan for Jobs 2012

Building Competitive Advantage Reduced Costs through Sensible Regulation

A smart approach to Regulation balances costs and benefits, and ensures that the benefits of good regulation are achieved in the most efficient and effective manner possible, ensuring competitive markets and reduced

prices, better quality and more choice for consumers. Better Regulation seeks to improve the mechanisms through which legislation is developed,

with the aim of removing systemic inefficiencies. Regulation is smart when policy is evidence based. This agenda includes not just reducing ‘red tape’ and administrative burdens for business across all of Government, but

includes the Better Regulation agenda of ensuring existing and new regulations and legislation is proportionate and targeted, balancing costs

and benefits for enterprises and society, and also ensuring that sectoral and economic regulation across government generally is cohesive and effective and promotes open and competitive markets. There is

recognition of the importance of driving the regulatory reform agenda in the Programme for Government.

[…]


50

Delivering on the Better Regulation agenda requires the involvement of all

Government Departments. However, the effort needs to be synchronised to ensure the consistency and robustness of Regulatory Impact Analysis

(RIA) of proposed legislation or restatement of regulations, as well as representing Ireland at European Working Groups and other fora. This responsibility was formerly within the Department of Taoiseach and there

is now a lacuna at the centre of Government as this responsibility has yet to be reassigned.

Economic and sectoral regulation is currently dispersed across a range of sectoral Departments and sectoral regulators from energy and

communications to transport and other areas, with limited mechanisms for

co‐ordination and for ensuring coherence as between regulated areas.

Again there is a need for greater cohesion and co‐ordination, in particular to ensure alignment with competition policy in general.

[List of Actions]

The Better Regulation agenda has the potential to deliver further cost

savings and efficiencies for firms across the country and assist them in growing employment, therefore in 2012 we will:

1.53 Examine options for a more cohesive approach to Better Regulation across Government and introduce new structures to improve coordination

and synchronisation. (DJEI, DPER, D/Taoiseach)

Awareness & Prioritisation of RIAs Domestic Legislation The Chief Whip publishes the Government’s legislation programme online at the

start of each Dáil session18. The first three sections of this programme list

A Bills which the Government expects to publish during the session B Bills in respect of which heads have been approved by Government and of which texts are being prepared

C Bills in respect of which heads have yet to be approved by Government

If a new column titled ‘Status of RIA’ were added to the legislation programme this would allow more transparent scrutiny of the RIA process across all

forthcoming primary legislation. D/Taoiseach collects weekly updates on the legislation programme from all Departments; including a column on RIA status in the format of these updates would raise the profile of RIA across the entire

system and ensure that officials working on legislation are reminded of the existing commitments to RIA on a weekly basis.

EU Legislation Government Departments regularly update a database maintained by

D/Taoiseach which tracks the status of all EU Directives awaiting transposition.

18

http://www.taoiseach.gov.ie/eng/Taoiseach_and_Government/Government_Legislation_Prog

ramme/


51

As the RIA guidelines stipulate that RIAs must be carried out on all EU Directives

and also mention conducting RIAs on transposition options in particular, it could be beneficial to add a field to this database on RIA status. Departments would

then be reminded on a regular basis of the existing commitments to carry out RIA on EU Directives and this information would be centralised and more easily accessible.

Ideally RIAs on EU Directives (and significant Regulations) should be carried out

an early stage; it may be worth discussing with the Permanent Representation to the EU if the reporting structures used to track all ongoing negotiations across the EU system could be modified to require Departments to report on the RIA

status of relevant proposals.

RIA prioritisation by business The above reporting structures, particularly if modified to include reporting on RIA, can be used by business to examine forthcoming proposals and identify

those which appear to have the most impact on business; proactive engagement by business with individual Departments could then ensure that thorough RIAs

are undertaken on the legislation of most significance for business. A modified version of the German SME Monitor which examines the Commission’s Work Programme actions for their relevance to SMEs may also be a useful tool to help

business identify significant proposals which should be scrutinised in advance of their implementation.

Centralising publication of RIAs As recommended by the 2008 Operational Review of RIA each Department

should centralise its RIAs on one webpage (as a number of Departments already do). A central portal could then link to all Departments’ RIA webpages, highlight

the most recently published RIAs and host the guidance material archived on the D/Taoiseach Better Regulation site. Establishing a web portal linking to Departmental websites would remove any issues around one Department

appearing to be responsible for the RIAs of all Departments and would be easier to set up quickly.


52

2. Nursing Homes Report

Chair: Esther Lynch, Irish Congress of Trade Unions

Introduction

In early 2012 the High Level Group on Business Regulation (HLG) agreed on priority issues to be investigated by eight subgroups as part of its 2012 work

programme; the Small Firms Association (SFA) raised the issue of administrative burdens on nursing homes and this was agreed as a priority issue. Esther Lynch was then asked to investigate the administrative burden on nursing homes

associated with registration and renewal of registration with the Health Information and Quality Authority (HIQA). In order to prepare this report

relevant stakeholders were invited to meet Esther Lynch to discuss their views on the current regulatory system and associated administrative burden.

The SFA raised this issue on behalf of one its member organisations, Nursing Homes Ireland (NHI), which claims that the process for renewing registration of

a designated centre for older people (hereafter ‘nursing home’) includes unnecessary administrative burdens because information already submitted to HIQA must be resubmitted. The Health Act 2007 requires that each designated

centre must be registered with HIQA and that this registration must be renewed every three years. In order to ensure that nursing homes are fit to provide

services to older people the registration process set out in the legislation requires information to be submitted to HIQA including applicant details, care centre details, facilities and services provided, as well as details of management

and staff. The process and fact of registration confirms publicly and openly that the registered provider is fit and legally permitted to provide nursing home

services. The application is completed by an ‘applicant’ on behalf of the registered

provider; if not the registered provider this person is nominated on behalf of the registered provider. The applicant should be a senior member of the

organisation, e.g. director, partner or CEO, with sufficient authority to make decisions and implement changes recommended following an inspection. This person and all persons participating in the management of the designated centre

must also satisfy the Chief Inspector of Social Services as to their fitness.

This report sets out to examine the administrative burden associated with renewal of registration and to make recommendations for reducing this burden.

There are currently 451 private nursing homes on HIQA’s register and registrations will be renewed on a three yearly basis beginning in November 2012. Renewal of registration for these centres will fall over the next three years

as follows: 2 in 2012, 59 in 2013, 243 in 2014 and 147 in 2015. There is therefore sufficient time to seek to amend the renewal of registration process

before the majority of centres must renew their registration with HIQA. The following organisations were invited to meet with Esther Lynch: Nursing

Homes Ireland, the Department of Health, HIQA, Impact, the Irish Nurses and


53

Midwives Organisation, the Irish Medical Organisation, the Health Service

Executive and Age Action Ireland.

Meetings were held with:

Nursing Homes Ireland: Tadhg Daly Department of Health: Geraldine Fitzpatrick, Patricia Lee, Dave Walsh -

Services for Older People

HIQA: Niall Byrne - Social Services Inspectorate Impact: Martin Bridgeman

Irish Nurses and Midwives Organisation: Sheila Dickson Irish Medical Organisation: Dr Anthony Owens

Administrative burdens associated with renewal of nursing home

registration

When examining the necessity of administrative burdens arising from regulation it is essential to keep in mind the aims of the particular regulation; in this case ensuring the safety and welfare of nursing home residents. Nursing home

operators are required to comply with the relevant regulations intended to ensure provision of a safe and effective healthcare system in nursing homes;

these regulations cover: rights, protection, quality of life and health and social care needs of

residents staffing and the care environment management and governance.

HIQA has produced National Quality Standards for Residential Care Settings for

Older People in Ireland (pdf) and also provides a guide to the standards (pdf) and a leaflet on registration and inspection (pdf). The relevant regulatory requirements are set out in the following legislation:

Health Act 2007 Health Act 2007 (Registration of Designated Centres for Older People)

Regulations 2009 (pdf) Health Act 2007 (Care & Welfare of Residents in Designated Centres for

Older People) Regulations 2009 (pdf)

Nursing homes are only allowed to operate if they are registered with HIQA;

records maintained by nursing homes are used to assist HIQA with its inspections and to demonstrate that required standards are being met. HIQA inspections may be announced or unannounced and can take place during the

week or at weekends at any time of day or night. The resultant inspection reports provide information to the residents themselves, their families and the

general public about the standard of care in individual centres. HIQA operates a registration regime which means that nursing homes cannot operate unless registered. Nursing home operators once registered must maintain their

compliance with the relevant regulations; HIQA carries out inspections of nursing homes to gather evidence of compliance in support of the registration regime.

The registers of residential centres for older people and the inspection reports can be viewed on HIQA’s website.

http://www.hiqa.ie/system/files/HIQA_Residential_Care_Standards_2008.pdf

http://www.hiqa.ie/system/files/HIQA_Residential_Care_Standards_2008.pdf

http://www.hiqa.ie/system/files/Guide_Residential_Care_Settings_Older_people_2009_A5.pdf

http://www.hiqa.ie/system/files/Res_Care_Standards_Older_People_DL_09.pdf

http://www.irishstatutebook.ie/2007/en/act/pub/0023/index.html

http://www.dohc.ie/legislation/statutory_instruments/pdf/si20090245.pdf?direct=1




http://www.hiqa.ie/resource-centre/registered-centres

http://www.hiqa.ie/social-care/find-a-centre/inspection-reports?field_report_type_centre_value_many_to_one=reportolderpeoples


54

The requirement to ‘register’ arises from the Health Act 2007 and is set out in

detail in the Health Act 2007 (Registration of Designated Centres for Older People) Regulations 2009 (SI No. 245 of 2009) and accompanying schedules:

Schedule 1 sets out the information to be provided when applying for registration.

Schedule 2 sets out the information to be submitted when applying for the

renewal of registration. Schedule 3 sets out the information and documents to be provided in

respect of registered providers and intended registered providers. Initial registration and renewal of registration are both underpinned by

administrative requirements set out in the above schedules; these administrative requirements or information obligations are intended to provide information to

help ensure the safety and welfare of nursing home residents. However the current registration renewal system, grounded in the relevant legislation, is entirely paper based and requires resubmission to HIQA of information which

may not have changed since initial registration as well as information which could not have changed. The resubmission of unchanged information that has

been previously verified by HIQA constitutes an unnecessary administrative burden on nursing home operators.

NHI also raised the issue of inspection standards being interpreted differently in different regions and by different regulators, thus giving rise to inconsistent

standards. For more information on this and other suggestions please contact Nursing Homes Ireland.

Recommendations for reducing administrative burdens

The fundamental principle underlying all of these recommendations is that there should be a clear relationship between the information requirements and the

protection of the safety, welfare and dignity of the resident in the nursing home. Long term

1) Completion of registration and renewal of registration should be possible online. The availability of online registration would significantly reduce

the amount of time taken to complete renewal of registration as the relevant forms could be automatically prepopulated with information and

supported by automatic prompts asking if information has changed (and if so, requesting provision of the necessary supporting information). Moving to an online registration system would have the extra benefit of facilitating

improved risk analysis similar to that incorporated in Revenue’s online systems. HIQA has expressed its desire to introduce an online system

subject to resource availability. Short term

2) Where operators have already established the accuracy of certain information and it cannot change the original proof should be accepted

as still valid.


55

3) Where operators have already established the accuracy of certain

information and it has not changed it should be possible to make a declaration to this effect and have the original proof accepted as still valid.

a. The consequences for a false declaration should be sufficiently

severe as to be dissuasive.

b. To ensure resident safety certain information obligations must

remain unaffected including requirements for a current Garda vetting report a recent photograph

relevant current registration status with a professional regulatory body

evidence that a person in charge or participating in the management of a designated centre for older people is physically and mentally fit for the purposes of the work that

they are to perform at the designated centre or, where it is impracticable for the person to obtain such evidence, a

declaration signed by the person that they are so fit

4) It is recommended that HIQA consider generating more guidance for

nursing home operators on compliance with relevant regulations and

related standards (similar to that provided by the Health and Safety

Authority). HIQA should consider working with other relevant bodies (e.g.

local Fire Services and Environmental Health Officers) on guidance on

standards and other regulatory requirements to assist operators and

ensure respect for standards across different regulators.

Esther Lynch October 2012


56

Schedules to the HEALTH ACT 2007 (REGISTRATION OF DESIGNATED CENTRES

FOR OLDER PEOPLE) REGULATIONS 2009 SCHEDULE 1

Information to be submitted when applying for the registration of a designated centre

Information required

1. Applicant details

a. If the applicant is a natural person

i. Name of applicant.

ii. Address of applicant.

iii. Contact telephone number and email address of applicant

b. If the applicant is a partnership

i. Name of partnership.

ii. Name and address of each partner.

iii. Address of the principal place of business of the partnership.

iv. Telephone number of the principal place of business of the partnership.

v. Name of the partner responsible on behalf of the partnership for the application.

vi. Contact telephone number and email address of the partner responsible on behalf

of the partnership for the application.

c. If the applicant is a company

i. Name of company.

ii. Name of Chairperson.

iii. Name of each other director.

iv. Name of Secretary, Chief Executive or person in similar overall management

position.

v. Address of the principal place of business of the company.

vi. Telephone number of the principal place of business of the company.

vii. Name of the person responsible on behalf of the company for the application and

his or her relationship with the company.

viii. Contact telephone number and email address of person responsible on behalf of

the company for the application.

d. If the applicant is a body established under the Health Acts 1947 to 2008 or the Health

(Corporate Bodies) Act 1961

i. Name of the person responsible on behalf of the body for the application and his or

her role in relation to the designated centre.

ii. Contact telephone number and email address of person responsible on behalf of the

body for the application.

e. If the applicant is an unincorporated body

i. Name of each member of the committee of management or other controlling

authority of the body

ii. Name of the manager of the body

2. Designated Centre Details

a. Name of the designated centre

b. Address of the designated centre

c. Telephone and fax numbers of the designated centre (if available)


57

d. Proposed date of establishment

e. State whether the applicant is the owner or the tenant of the premises at which the business

of the designated centre is or will be carried on and, if the applicant is a tenant, state the name

and address of the owner of the premises

f. Category of designated centre

i. a designated centre to which paragraph (a)(iii) of the definition of “designated

centre” in section 2 of the Act applies

ii. a designated centre to which paragraph (b) of the definition of “designated centre”

in section 2 of the Act applies.

g. State whether the designated centre is currently a designated centre carried on in

accordance with section 69 of the Health Act 2007.

3. Purpose of Designated Centre

A copy of the statement of purpose compiled in accordance with article 5 of the Health Act 2007

(Care and Welfare of Residents in Designated Centres for Older People) Regulations 2009.

4. Facilities and Services

a. Description of the premises, including accommodation and whether the premises are

purpose-built or have been converted for use as a designated centre.

b. Statement of services to be provided at the designated centre.

c. Arrangements for residents to engage in social activities and leisure interests.

d. The maximum number of residents who, in the opinion of the applicant, can be

accommodated at the designated centre.

e. The maximum number of residents who will be accommodated at the centre.

f. Summary of the complaints procedures.

5. Management and Staff Details

a. Name of the person to be in charge of the designated centre and his or her relationship with

the registered provider including all partners in a partnership and all members of the

managing committee of an unincorporated body.

b. Arrangements for the management of the designated centre when the person in charge of

the centre is absent.

c. Where the person to be in charge of the centre is, or is proposed to be, in charge of more

than one centre, the name of the person who will be responsible for the management of the

centre when the person in charge is not present at the centre.

d. Name of each other person who will participate in the management of the designated

centre.

e. State the number of staff, full time equivalent and the positions they will hold.

f. State whether the intended registered provider or any staff member will be resident at the

designated centre.


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SCHEDULE 2

Information to be submitted when applying for the renewal of registration of a designated centre

Information required

1. Registered Provider Details

a. If the registered provider is a natural person

i. Name of Registered Provider.

ii. Address of Registered Provider.

iii. Contact telephone number and email address.

b. If the registered provider is a partnership

i. Name of partnership.

ii. Name and address of each partner.

iii. Address of the principal place of business of the partnership.

iv. Telephone number of the principal place of business of the partnership.

v. Name of the partner responsible on behalf of the partnership for the application.

vi. Contact telephone number and email address of the partner responsible on behalf

of the partnership for the application.

c. If the registered provider is a company

i. Name of company

ii. Name of Chairperson.

iii. Name of each other director.

iv. Name of Secretary, Chief Executive or person in similar overall management

position.

v. Address of the principal place of business of the company.

vi. Telephone number of the principal place of business of the company.

vii. Name of the person responsible on behalf of the company for the application and

his or her relationship with the company.

viii. Contact telephone number and email address of person responsible on behalf of

the company for the application.

d. If the registered provider is a body established under the Health Acts 1947 to 2008 or a

body established under the Health (Corporate Bodies) Act 1961

i. Name of the person responsible on behalf of the body for the application and his or

her role in relation to the designated centre.

ii. Contact telephone number and email address of person responsible on behalf of the

body for the application.

e. If the registered provider is an unincorporated body

i. Name of each member of the committee of management or other controlling

authority of the body

ii. Name of the manager of the body

2. Designated Centre Details

a. Name of the designated centre.

b. Address of the designated centre.

c. Telephone and fax numbers of the designated centre.

d. Date of establishment of designated centre.

e. Date and expiry date of current registration.


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f. State whether the registered provider is the owner or the tenant of the premises at which the

business of the designated centre is being carried on and, if the registered provider is a tenant,

state the name and address of the owner of the premises

g. Category of designated centre

i. a designated centre to which paragraph (a)(iii) of the definition of “designated

centre” in section 2 of the Act applies

ii. a designated centre to which paragraph (b) of the definition of “designated centre”

in section 2 of the Act applies.

3. Purpose of Designated Centre.

A copy of the statement of purpose compiled in accordance with article 5 of the Health Act 2007

(Care and Welfare of Residents in Designated Centres for Older People) Regulations 2009.

4. Facilities and Services

a. Description of the premises, including accommodation, and whether the premises are

purpose-built or have been converted for use as a designated centre.

b. Statement of services provided at the designated centre.

c. Arrangements for residents to engage in social activities and leisure interests.

d. The maximum number of residents who, in the opinion of the applicant, can be

accommodated at the designated centre.

e. The maximum number of residents who will be accommodated at the centre.

f. Summary of the complaints procedures.

5. Management and Staff Details

a. Name of the person in charge of the designated centre and his or her relationship with the

registered provider including all partners in a partnership and all members of a management

committee of an unincorporated body.

b. Arrangements for the management of the designated centre when the person in charge of

the centre is absent.

c. Where the person to be in charge of the centre is, or is proposed to be, in charge of more

than one centre, the name of the person who will be responsible for the management of the

centre when the person in charge is not present at the centre.

d. Name of each other person who is participating in the management of the designated

centre.

e. State the number of full time equivalent staff and the positions they hold.

f. State whether the registered provider or any staff member is/ will be resident at the

designated centre.


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SCHEDULE 3

Information and documents to be provided in respect of registered providers and intended registered

providers of designated centres for older people

Information required in respect of a registered provider or intended registered provider where the

registered provider or intended registered provider is a natural person, a partnership, a company or an

unincorporated body.

1. Proof of identity

2. Garda vetting report(s).

3. Details of any previous experience of carrying on the business of a designated centre in Ireland or

similar residential services outside of Ireland.

4. Any other such information is the chief inspection reasonably requires for the purposes of section

50 of the Act.

Information required in respect of a registered provider or intended registered provider where the

registered provider or intended registered provider is a body established under the Health Acts 1947 to

2008 or a body established under the Health (Corporate Bodies) Act 1961.

1. Proof of identity of the person responsible on behalf of the body for the application.

2. Details of any previous experience by the body of carrying on the business of a designated centre

3. Any other such information is the chief inspection reasonably requires for the purposes of section

50 of the Act.

Information required in respect of the person in charge or proposed to be in charge and any other

persons participating in or proposed to be participating in the management of a designated centre for

older people.

1. Proof of the person’s identity, including a recent photograph.

2. A copy of the person’s birth certificate.

3. Garda vetting report.

4. Three written references, including a reference from a person’s most recent employer (if any) in a

format specified by the chief inspector.

5. Details and documentary evidence of any relevant qualifications or accredited training of the

person.

6. Relevant current registration status with a professional regulatory body.

7. A full employment history, together with a satisfactory history of any gaps in employment.

8. Where a person has previously worked in a position whose duties involved work with children or

vulnerable adults, so far as reasonably practicable, verification of the reason why the employment or

position ended.

9. Evidence that the person is physically and mentally fit for the purposes of the work that they are to

perform at the designated centre or, where it is impracticable for the person to obtain such evidence, a

declaration signed by the person that they are so fit.


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3. Late Payment and Government Invoicing Report

Chair: Jim Copeland, Hardware Association Ireland

This is a report from the sub group looking at reducing late payments and

simplifying Government invoicing and purchase orders. The group was made up of Patricia Callan SFA, Mark Fielding, ISME and Jim Copeland IHBMA.

In producing this Report, the sub-committee has taken consideration of the following issues:

1. The consultation on transposing the recast directive 2011/77/EU on Combating Late Payments in commercial transactions which is due to be transposed into Irish law in March 2013 and of which a public consultation

has been completed by the SME unit of the Department of Jobs, Enterprise & Innovation.

2. The work that has already been done on this issue by the Advisory Group on Small Business in its “The Voice of Small Business” report.

3. The Government commitment under the EU/IMF Programme of Support

for Ireland to extend the 15 day prompt payment rule beyond Central Government Departments, to include the Health Service Executive, the

Local Authorities, State Agencies and all other Public Sector Bodies (excluding Commercial Semi-State Bodies).

4. The commitment in the Action Plan for Jobs 2012 to “the introduction, in

the enterprise sector, of a Prompt Payments Charter, to improve cashflow between businesses” (6.4)

1. Summary of Recommendations

1. Late Payments - Introduce a Charter of Prompt Payments with the

backing of the Government and underpinned by an awareness raising campaign

2. Government Invoicing – Consider a “Procurement Pledge” as a demonstration of the Government’s commitment to ensure that the public sector is faster to do business with and maximises opportunities to drive

economic growth and stimulate innovation. 3. Government Invoicing - Set up national databases aligned to global

standards for procurement including price comparison and product performance.


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2. Late Payments

2.1 Background to Late Payments The Irish Government committed in July 2011 to extend the 15-day payment rule in the public sector, beyond Central Government Departments to include the Health Service Executive, the Local Authorities, State Agencies and all other

Public Sector Bodies (excluding Commercial Semi-State Bodies). This has had a very positive impact on those companies supplying the public sector; however

the initiative has not had the desired effect of altering the payment behaviour of companies in the private sector. Surveys by ISME and the SFA suggest that the

average payment period for an SME is 6219 or 7120 days. Many SMEs are now in a dire financial situation due to not getting paid on time, with the consequent cash flow issues that arise.

2.2 Legislation Legislation to combat late payment in commercial transactions came into effect in 2002. Statutory Instrument 388 of 2002 provides that interest will become

payable if payments for commercial transactions are not met within 30 days, unless otherwise specified in a contract or agreement. A recast Directive 2011/7/EU on combatting late payment in commercial transactions is due to be

transposed into Irish Law in March 2013. It provides that, unless otherwise specified in an agreed contract, the interest rate will go from 7% + ECB rate at

January/July per annum to 8% + ECB rate at January/July. The Directive requires Member States to provide mechanisms to both discourage late payment and enable creditors to exercise their right to collect. However, the provision of

the right to charge interest that is already present in Irish law in principle facilitates both of these mechanisms but has achieved little in reality.

2.3 Enforcement The Sub-Committee considers that the problem is not with the legislation itself but rather with its enforcement. The number of companies that charge penalty

interest to their business partners is reportedly quite low. Reasons for this vary, but most business owners do not want to upset an established business relationship by insisting on payment terms; others have no business contracts in

place or simply lack the resources to go to Court. There is anecdotal evidence that larger companies dictate their terms to their suppliers with the smaller

parties being more or less forced to agree with the terms. The new Directive contains provisions that allow the parties to contract beyond

60 days and negotiate terms, providing however that these terms are not grossly unfair to the creditor (article 3 (5) and article 7 , Recast Directive

2011/7/EU ). France and Spain have legislation in place that prohibits parties from contracting

beyond 60 days. Initial research shows that France’s 2008 modernisation law brought down the maximum payment delay for all businesses from 90 to 60

days, to be achieved by 1st January 2012. France allow a longer payment period for hospitals as there is a special regime for health establishments that allows

19 Source: SFA 2013 20 Source: ISME 2012


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them to pay invoices within 50 days - all other public bodies must pay within 30

days. The new directive allows “member states to grant public entities providing

healthcare a certain amount of flexibility in meeting their commitments “..

In France, it would seem the Autorité de la concurrence (Competition Authority)

is policing the legislation. In Spain, since August 2010, a structural law has been in place which obliges companies in the public sector to pay invoices within 30 days, which is extended to 60 days for the private sector which was paying

on average up to 107 days. They have an implementation transition period to bring those days down to 85 days by December 2011, from January 2012 to 75

days and by January 2013 to 60 days.

2.4 Solutions envisaged

Code of practice for businesses In Point 6.4 of the Action Plan for Jobs, the Irish Government commits to help towards “the introduction, in the enterprise sector, of a Prompt Payments

Charter”. It is hoped that companies that sign up to the Charter and who are contractually committed to pay another company will do so within the agreed

timeframe. This Prompt Payment Charter is in the early stages of development and is

currently being considered by members of the business community and officials from the Department of Jobs, Enterprise and Innovation.

In drawing up this Charter, it will be important to ensure that it dovetails with the content of the regulations that will give effect to Directive 2011/7/EU. There

is anecdotal evidence that the issue of late payment remains unresolved in the UK even with such a charter in place, as small companies are reluctant to sign

up to it21. Information campaign

It is believed that a substantial number of businesses are only somewhat aware or are completely unaware of the legislation governing the 30-day payment rule.

An information campaign combined with a Prompt Payment Charter should be considered as an inexpensive and efficient means of helping small and medium-sized businesses.

Champion

In light of the above, it would seem that a cultural change needs to take place in Ireland that would encourage companies to pay in a timely manner. For this reason, some have called for a “Champion” to back a Prompt Payment Charter,

the Government was seen as a possible choice as it already has its own prompt payment ethos with its 15-day payment rule. The IDA or Enterprise Ireland (EI)

could also be considered as advocates for a prompt payment charter. The Minister for Small Business is ideally placed to bring the relevant stakeholders

together to establish this Charter.

21 http://www.companiesmadesimple.com/project/blog/the-prompt-payment-charter-has-

it-had-an-impact-on-the-company-formation-sector/

http://www.djei.ie/publications/2012APJ.pdf


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Mandatory payment periods

Forcing companies to pay within a fixed period of time could help alleviate the cash flow problem of SMEs; this could be subject to a full cost-impact analysis of

companies trading nationally and internationally. In particular, the Directive 2011/7/EU itself notes that:

“Such late payment negatively affects liquidity and complicates the financial management of undertakings. It also affects their competitiveness and profitability when the creditor needs to obtain external financing because of late payment. The risk of such negative effects strongly increases in periods of economic downturn when access to financing is more difficult."

The Government’s own recent regulatory impact analysis for the Construction

Contracts Bill states.

“Late payment represents a significant cost to business e.g. impacting on cash flow; adding financial costs; squeezing investment opportunities; and, fuelling uncertainty for many businesses, in particular, SMEs, especially in times of limited and expensive access to finance. The result is that their competitiveness and solvency are often compromised. The risk of such negative effects strongly increases in periods of economic downturn when

access to financing is more difficult.” (p. 13).

In relation to its effect on competitiveness, the summary of the impact assessment of Directive 2011/7/EU from Europe states that in definition 1.5 on page 3

“Late payments have a negative impact on intra-community trade. In most members states businesses perceive selling goods and services to businesses and authorities in another member state as entailing a high risk of late payment among other reasons. The risk of late payment discourages enterprises from selling products and services in other member states since it increases uncertainty and the cost of doing business. Very long payment periods in public procurement contracts and late payments by public authorities also discourage economic operators to participate in public procurement procedures. This discouragement reduces the capacity of public authorities to get best value for the tax payers’ money”.

The Courts The Courts Service and the Department of Justice are currently trying to make default judgment more creditor-friendly by allowing the winning party to claim a

higher proportion of the court costs against the losing party, thereby offsetting some of the legal fees. At present, only a minuscule amount of the costs can be

claimed back. According to figures from the Courts Service, 90% of the cases in the District Court end with a default judgement, i.e. one of the parties does not

appear in court and does not contest the claim. Expansion of this approach is being considered by the Minister for Justice and is seen as feasible. The fact that a company with a default judgment awarded against it has its name

published in the Stubb’s Gazette also acts as a strong deterrent as that publication is consulted by banks, suppliers, etc.


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2.5 Conclusions Late payments are distracting the owners of businesses from focusing on growth opportunities. SME representatives are saying that SMEs cannot afford to go

through an entire month without being paid for their goods or services; unlike larger businesses, they cannot absorb the burden of not being paid on time as

payment of their overheads and staff costs on a monthly basis is largely dependent on receiving prompt payment for goods and services provided. Legal costs are obviously an issue for SMEs and the Department of Justice is

trying to make the Courts as cost neutral as possible for debtors, however for the foreseeable future companies will still require legal representation if they

want to go to Court. The Irish Government has in place a number of policies and strategies to support

the SME sector: its review of public procurement practices and its commitment to pay within 15 days of receiving a valid invoice which has been extended to

other State bodies. However, much remains to be done and the introduction of a properly advertised Charter of prompt payments that would be supported by the Government would be a step in the right direction. The sub-group agreed

that the new directive should discourage any minimalist approach and that whatever support Minister Bruton and Minister Perry need from the business

community would be forthcoming. The case for improved liquidity helping everyone’s position needs to be made and will have a tangible and positive

impact for Irish business in general. A Code of Practice and an Information Campaign as discussed that

encourage prompt payment and discourage late payments would be very helpful. If businesses paid their bills on time and in full banks would not need to lend

nearly as much as we currently think they should.

3. Simplify government invoicing and Purchase Orders

3.1 Introduction In order to address this issue, the subgroup considers that electronic data interchange (EDI) and e-procurement should be encouraged by policy makers. EDI/e-Procurement enables the computer-to-computer exchange of business

documents between companies and Government using a standard format, regardless of the kind of computer or software each company is using.

EDI “bridges the gap” between companies and systems and uses GS1 message standards to ensure everyone uses a common language. EDI helps companies

conduct ecommerce and online communication efficiently and accurately. Companies and Governments benefit from faster response time, smoother

invoicing processes, increased inventory turns, and cost savings from reduced physical shipping or mailing.

3.2 Experience in Denmark – opportunity for Ireland In Denmark, the story of E-Invoicing began with the establishment of the Agency for digitisation, which is part of the Danish Ministry of Finance. The aim of the agency is to promote digitisation of the public sector in the most efficient

and effective way. A Public Payment Act was passed in December 2003 and


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identified four Initiatives with total efficiency saving identified in a general

budgetary analysis of public payments totalling appx. € 100 mill./year:

• Elimination of float-days Appx. € 25 mill./year • Closing of cash tills Appx. € 15 mill./year • Easy Account Appx. € 30 mill./year

• E-Invoicing Appx. € 30 mill./year

All public authorities are now registered in the NemHandels (Easytrade) registry with their unique ID - GS1 Global Location Numbers (GLNs) and a GLN registry is maintained by GS1 Denmark. With a total of 15 million invoices per year

there was an estimated €2 reduction in handling cost per invoice (this was a very conservative estimate as it was used to calculate the reduction in funding

for local authorities. Experience shows that €8 reduction per invoice can be expected)

The following link refers to a short video on the Danish initiative and the results. http://www.youtube.com/watch?v=w7Ix62I8ktg

3.3 European Initiative – PEPPOL As a follow on from the Danish einvoicing initiative the Pan-European Public

Procurement Online project (PEPPOL) was established in 2008 by the European Commission to facilitate e-invoicing with governments. Industry best practice has proven that the use of recognised GS1 standards is critical to the long term

success of such initiatives.

Ireland currently joins 11 European neighbours who have embraced PEPPOL (Austria, Denmark, Finland, France, Germany, Greece, Italy, Norway, Portugal, Sweden and The United Kingdom).

There is, since February 2012, an EU eInvoicing pilot initiative with an Irish Pilot

of 6 public sector bodies supported by EDI solution providers. The Danish eInvoicing initiative is the basis for the Peppol project

In tandem, to align with best practice in other EU Member States, the Government could introduce a “Procurement Pledge” as a demonstration of its

commitment to ensure that the public sector is faster to do business with and maximises opportunities to drive economic growth and stimulate innovation. The Government’s Procurement Pledge could be to:-

1. Give all types of potential providers, especially SMEs, simpler, more

streamlined procurement processes through the adoption of globally standard bar-coding and EDI solutions.

2. Give potential providers greater certainty of our future demand.

3. Work with potential providers to identify and address strategic capabilities in supply chains to ensure providers are prepared to meet this future

demand. 4. Operate an open door policy for business so that we can develop a more

strategic relationship with current and future providers.

5. Back Irish businesses when bidding for contracts overseas.

http://www.youtube.com/watch?v=w7Ix62I8ktg


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Procurement should be central to driving quality and value in Ireland and the

adoption of recognised, globally-used and proven supply chain standards provides a framework for all stakeholders to comply with regulatory and tender

requirements and to best meet the challenges of today’s complex supply chain. In this regard, all suppliers should be required to adopt GS1 globally standard bar-coding solutions, to improve procurement data and enable price

comparisons whilst improving stock control and consumer/end user safety.

It should be possible that all tender and contract information for contracts over €10,000 in addition to being published (as they are today on e-tenders), also stipulate a requirement for best-in-class procurement practices – in particular

the use by suppliers of internationally recognised coding standards. The establishment of national databases, aligned to global standards for procurement

including price comparison and product performance should also be encouraged.

Sub Group on Late Payments and Simplifying Government invoicing and purchase orders October 2012


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4. Audit Exemption Report

Chair: Mark Fielding, ISME The sub-group considered a number of issues in relation to:

AUDIT THRESHOLDS & EXEMPTION ISSUES

1. Increase limits to EU maximum (Regulation were signed by the Minister for Jobs, Enterprise and Innovation in August 2012)

2. Criteria: Reduce from requirement to meet 3 of 3 thresholds to 2 of 3

3. Remove late annual return penalty 4. Allow small groups get audit exemption

5. Allow dormant subsidiaries get audit exemption

AVAILING OF THE AUDIT EXEMPTION

Introduction

The Companies (Amendment) (No.2) Act 1999 introduced the concept of the audit exemption for companies. This was later amended by the Companies (Auditing and Accounting) Act 2003 and subsequently amended following

enactment of Section 9, Investments Funds, Companies and Miscellaneous Provisions Act 2006.

Conditions The 2006 Act became effective for accounting periods commencing on or after

24th

December 2006. The revised conditions also apply to financial years which commenced prior to 24 December 2006 and ending on or after 24 February

2007. The Act sets down a number of conditions that a company must fulfil before the exemption can be availed of. All conditions must be met (for the year and

the preceding year).

The conditions are as follows:

1. The company is a company to which the Companies (Amendment) Act 1986 applies (a company limited by guarantee may not avail of the exemption).

2. The amount of the turnover of the company does not exceed €7,300,000 per

annum. 3. The balance sheet total of the company does not exceed €3,650,000.

4. The average number of persons employed by the company does not exceed 50.

5. The company is not a bank or insurance company.

6. The company is not part of a group of companies. 7. The company is up to date with its filing requirements.

8. The company is not one of the following:- • A stock broking company

• An investment business company • A company that is engaged in the business of accepting deposits or other

repayable funds or granting credit for its own account • A company that is an associated body of a building society within the meaning of the Building Societies Act 1989


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• A company that is an associated enterprise of a credit institution within the

meaning of the European Communities (Consolidated Supervision of Credit Institutions) Regulations, 1992 (S.I. No. 396 of 1992)

• An investment company within the meaning of Part XIII of the Companies Act, 1990

• A company that is a management company or trustee within the meaning of

Part XIII of the Companies Act, 1990 • A company that is an undertaking for collective investment in transferable

securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989)

• A company that is a management company or trustee of an undertaking for collective investment in transferable securities within the meaning of the

European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989)

• A company that is a management company within the meaning of the Unit

Trust Act, 1990. • A company that is a general partner or custodian of an investment limited

partnership within the meaning of the Investment Limited Partnerships Act, 1994.

• A company that is an undertaking with close links with a financial undertaking

within the meaning of the Supervision of Credit Institutions, Stock Exchange Member Firms and Investment Business Firms Regulations, 1996 (S. I. No. 267

of 1996) • Any other company, the carrying on of a business by which is required by virtue of any enactment or instrument thereunder, to be authorised by the

Central Bank. • An insurance company

• An insurance intermediary company • A company that is an accepted body within the meaning of the Trade Union Acts, 1871 to 1990.


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Deciding to avail of the audit exemption

Once the directors are satisfied that the company meets all criteria then they may avail of the exemption. The decision to avail of the exemption must be

recorded in the minutes of the directors. The directors should ensure that the company is not required by its

Memorandum and Articles of Association to have an annual audit. The directors should also consider whether any third party reporting requirements exist which

require them to have an audit. Outside the scope of this document, but worthy of separate discussion, is the increasing demands from lending institutions for audits.

Increase Limits to EU Maximum The thresholds for audit exemption were as follows:

LIMITS IRELAND EU MAXIMUM

TURNOVER €7.3M €8.8M

BALANCE SHEET TOTAL €3.65M €4.4M

EMPLOYEE NUMBERS (avg) 50 50

While the Sub-Group had the matter under consideration, the Minister for Jobs, Enterprise and Innovation announced that he was increasing the number of businesses exempt from the requirement to hire external auditors to the

maximum level permitted under EU law. The Irish limits were increased to the EU maximum in August 2012.

CHANGE FROM 3 OF 3 LIMITS TO 2 OF 3 QUALIFYING THRESHOLDS.

UK companies currently need to meet 2 out of 3 thresholds to avail of audit

exemption where Irish companies are currently required to meet all three thresholds. Changing the thresholds from three to two is a complex matter that

would have knock on effects on accounting procedures and the Sub-Committee understands that the matter will be further examined in due course.

The Sub-Committee proposes that the limit threshold criteria be further considered and reduced from 3 of 3 to 2 of 3.

REMOVE LATE ANNUAL RETURN PENALTY.

At present, a late filing fee of €100 is payable in respect of an annual return on

the day after the expiry of the filing deadline, with a daily fee of €3 accruing


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thereafter, up to a maximum fee of €1,200 per return. These fees were fixed in

2001 and have not been increased since that date. The late filing fee is only waived in certain circumstances.

It is also important to note that companies have at least ten months after their financial year end in which to file their annual return.

By way of comparison, the applicable penalties for late filing in the UK are more severe than those in Ireland, with penalties ranging from St£ 150 to St£ 1,500

for private companies and from St£ 1,500 to St£ 7,500 for public companies. The UK regime also provides for penalties to be doubled if a company files its

accounts late in two consecutive financial years.

Statistics on Late Filing Notwithstanding that the current Irish fees are lower than the UK, the statistics from the CRO indicate that since the late filing fees were introduced in 2001,

there has been a significant increase in compliance by Irish companies with their annual filing obligations. Whereas prior to 2001, only 13% of companies filed

their annual returns on time, in 2010, only 12% of companies were late filing their returns. The Department and the CRO want to promote filing on time.

Loss of Exemption Audited accounts represent the norm; where companies are permitted to

dispense with having their accounts audited, one of the conditions attaching is that their annual return and accounts are filed and publicly available. Failing to comply with the most basic of company law disclosures within the permitted

time will cause companies to lose their ability to avail of the exemption having shown themselves remiss.

The significant distinction between the systems operated in Ireland and the UK however is that the loss of the audit exemption for eligible companies is

applicable in Ireland and NOT in the UK.

Thus, for example, if a company loses its audit exemption in 2010, it must file audited accounts in 2010 and 2011. It must file correctly and on time in 2011

and 2012 in order to be in a position to claim the audit exemption again in 2012. The ACCA made a strong argument in relation to the loss of audit exemption on

late filing of returns, given the recessionary times, in their presentation at the High Level Group on Business Regulation meeting in 2012.

Some of the arguments being as follows:

1. The ban is absolute; there is no exemption or appeal. Even CRO allows waiver of penalty for a late annual return:

A late penalty waiver can only be applied for using the following criteria:

Medical circumstances relating to one of the Directors or very close family member with documentary evidence of same showing proximity to Annual

Return filing period and how this prevented filing on time.


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Bereavement relating to one of the Directors or very close family member

with documentary evidence of same, and showing proximity to Annual return filing period.

Any other genuine type of force majeure outside of the control of the company or presenter.

2. The penalty is out of proportion to the ‘crime’, with a statutory audit adding at least €1,000 of cost for a service that is not needed or wanted.

3. The ‘crime’ is already punished by way of late filing fines that are proportionate and appropriate.

4. A fraudulent business person will ensure that they file on time if an audit would uncover criminal activity. The penalty only affects legitimate but

disorganised or under pressure businesses or a tiny minority of hapless criminals. If an audit is only imposed to catch the tiny minority of criminal business who file late annual returns, it is the wrong tool to do so as audits

primary focus is opining on truth and fairness and not detecting fraud.

The current system was also criticised for characterising the audit function as a “punishment”. This is not what an audit is intended to be. It is also argued that

going back after the fact to audit a company’s accounts is neither easy nor desirable, particularly in terms of, for example, stock-taking exercises which

should have occurred at certain points of time for the purposes of audit. This issue was investigated by the Company Law Review Group who came to the

conclusion in their 2011report that there be no change to the current late filing fees.

Appeals The CRO does not have the authority to reinstate a lost audit exemption. Once a

company does not meet all the conditions required to be eligible for audit exemption, the CRO is legally obliged to apply late filing penalties and to require

that the company file audited accounts. The only method of appeal is to the High Court, on notice to the CRO, for an

order extending the time for filing of an annual return. If granted, this allows the company extra time to files its annual return before penalties are incurred. When

the company files its annual return before this extended date, it will not be liable to late filing fees or lose its audit exemption.

The process of making an application to the High Court is costly and renders the appeal process prohibitively expensive particularly for small and medium

companies. It is proposed that this appeal function be moved to the District Court,

which will allow for a faster, more cost effective procedure which can be availed of by companies in genuine difficulties, without necessarily

having to instruct a lawyer. As an alternative, the Circuit Court might be


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given jurisdiction in such cases and there is potential for uncontested

applications to be delegated to the County Registrar.

Small Groups and Dormant Subsidiaries The Sub-group learned while considered the possibility of allowing Small Groups and Dormant Subsidiaries to avail of audit exemption that proposals in relation

to these had been included in the Companies Bill 2012. Chapter 15 of part 6 of the Companies Bill 2012 covers Small Groups.

SUMMARY PROPOSALS

1. Increase limits to EU maximum. (Regulation in place since August 2012)

2. Propose that the criteria be reduced from 3 of 3 to 2 of 3. 3. Do not propose removal of late annual return penalty. (However should be

put up for consideration again in the event of improvement in compliant

returns) 4. Propose to allow small groups and dormant subsidiaries get audit

exemption. (proposals included in the Companies Bill 2012.

Subgroup on Audit Thresholds (Mark Fielding) October 2012

http://www.djei.ie/publications/commerce/2011/Companies%20Bill%20-%20Part%206%20-%20Soft%20Copy.pdf

http://www.djei.ie/publications/commerce/2011/Companies%20Bill%20-%20Part%206%20-%20Soft%20Copy.pdf


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5. VAT Cash Accounting Rules Report

Chair: Ian Talbot, Chambers Ireland

Introduction: The High Level Group on Business Regulation (HLG) has prioritised a number of

areas for attention in its Work Programme for 2012. One of these is to explore the easing of the cash flow burden on Small and Medium Enterprises (SMEs) where insufficient working capital can hinder the development of the business’s

employment potential or even its viability. The member of the HLG tasked with progressing this matter is Ian Talbot, Chief Executive Officer, Chambers Ireland.

Executive Summary

On the face of it a rapid introduction of a threshold of €2million should be easily accommodated under EU legislation, i.e., not requiring any engagement in a

consultation process with the V.A.T. Committee if delivered nationally before 31 December 2012. We would therefore urge that this matter be enacted as part of budget 2013 with a view to exploring further options to ease the cash flow

burdens in the future.

Recommendations: 1. That the threshold is increased to €2 million euros before the 31

December 2012 in line with the EU Directive.

2. That this threshold is open to indexation and the base increased at a

rate to be explored and analysed in due course.

Legislative Provisions for Changes:

E.U. Council Directive 2010/45/EU of 13 July 2010 (amending Directive 2006/112/EC on the common system of value added tax as regards the rules on

invoicing) is designed to create a harmonised framework for invoicing. It aims to simplify the invoicing requirements for business and to provide tax administrations with an effective means of ensuring tax is paid. This Directive is

due to be transposed on the 31 December 2012. Paragraph 4 of this Directive states :

“….Member States should have the option of allowing V.A.T. to be accounted using a cash accounting scheme which allows the supplier to pay V.A.T. to the

competent authority when he receives payment for a supply.”

Article 167a of the Directive allows for Member States to apply an optional scheme that allows V.A.T. chargeable in accordance with Article 66(b) to be postponed until the goods or services received has been paid to the supplier.

This scheme shall set a threshold based on the annual turnover calculated in accordance with Article 288.

“That threshold may not be higher than €500,000…. Member States may

increase that threshold up to €2,000,000 …..after consulting the V.A.T. Committee. However, such consultation of the V.A.T. Committee shall not be required for Member States which applied a threshold higher than €500,000

…..on the 31 December 2012.”


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Article 237 of the Directive sets a requirement for the Commission, by the 31 December 2016, to present to the Parliament and Council, an assessment

report, based on independent economic study on the impact of these invoicing rules. This report will also include the extent to which the rules have effectively led to a decrease in administrative burdens for businesses.

Activity

The secretariat to the HLG arranged for the subgroup to meet with the Department’s tax policy advisor to outline the particulars of this complicated issue and illustrate exactly where the administrative burdens occur. Chambers

presented the meeting with the results of recent surveys on the membership of the Dublin Chamber of Commerce illustrating the difficulties experienced with

maintaining revenue and managing cash flow. Generally, the difference in the length of time between goods or services

received (when the V.A.T. becomes due) and the average time for payments received from invoices was particular to this subgroup given that this is where

the difficulties occur with managing a small or medium enterprise. In addition, the recovery of VAT paid on bad debts adds an additional layer of administration and complexity for SMEs struggling with cash flow challenges and operating an

invoice basis of V.A.T. This can be compounded by companies often paying V.A.T. to the Revenue Commissioners before they themselves have been paid by

customers. Currently, there is a cash accounting system in place under Irish tax law. The

scheme allows companies to account for V.A.T. on sale on the basis of payments received, rather than tax invoices issued and has the effect of easing the cash

flow pressures on small businesses. The qualifying criteria for this system is considered too restrictive in that the annual turnover of the business must not exceed €1,000,000. The proposal tabled is that the threshold is raised to those

companies where the annual turnover is under €2,000,000. This would not exceed EU regulations and would be consistent with other countries. The

proposal would have a zero impact on a full year of Exchequer receipts. There may be a delay in receipts for a changeover period that could appear as a cost

but this would level out over a full accounting period as the V.A.T. owing would be delayed, but would still be paid.

The secretariat attended a meeting with the Department’s tax policy advisor, officials from the Department of Finance and the Revenue Commissioners. The

threshold proposal was put forward with the request that given the current economic climate and the difficulties experienced by SMEs in maintaining cash flow, that the proposal would be given full consideration. The officials agreed to

give consideration to all of the points raised and look into the cost to the Exchequer of implementing any such changes.

Latest Information Submitted in Support of this Proposal:

According to figures provided by the CSO to Dublin Chamber, there are 4,658

companies (excluding retail companies – as this proposed change would not apply to them) that have a turnover between €1m and €2.5m. The following


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table illustrates that these companies cover a wide range of sectors, which

employ approximately 50,000. The size of these companies is equally split between micro enterprises employing less than 10 staff and SMEs employing

over 10 staff. The information provided by the CSO, coupled with other information we have received from members, provides the basis for a costing of this proposal.

The estimated contribution to the Exchequer in terms of VAT for these

companies in the year is between €350m and €450m. Based on average payment period data available, we estimate that the highest potential amount of VAT that could be deferred is approximately €150m to €200m. However, this is

based upon a 100% uptake of the higher threshold. Based on past experience, this level of take up is unlikely, as there is a cost to companies to switch

accounting systems. There is also no benefit to be gained by companies not impacted by cash flow delays. Therefore, given the aforementioned survey data by the Chamber, the likely deferred VAT would be closer to €30m to €50m.

While deferring such a sum has a cash flow impact on the Exchequer, the true accounting cost is the financing cost of the deferred VAT revenue.

The latest data shows that, the rate of Government borrowing on secondary markets is about 6.3%. The financing costs of the deferred revenue are

estimated at between €12m and €16m for 2013, assuming full (100%) take-up of the scheme.


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6. Part-Time Staff Procedures Report

Chair: Tim Ryan, Tim Ryan Communications

Recommendations The group welcomes the fact that consideration of the application of the

jobseekers benefit and allowance scheme conditions to workers who are

employed on a part-time, casual or systematic short-time basis, is a priority

for DSP. The group takes the view that reform in this area is essential.

The Joint Oireachtas Committee on Jobs, Social Protection and Education

report, A Review of the status of casual workers in Ireland, in May 2012

makes a number of constructive suggestions in this area, including

recommendations that entitlement to jobseeker’s payments be based on an

hourly rather than the current daily system, reform of certain disincentive

effects of the current system, greater use of IT, and an increased role for a

reformed Part-Time Job Incentive scheme.

The group largely concurs with the views of the Joint Oireachtas Committee

but recognises that considerations in this area will be complex and must take

place in the context of other social welfare reforms, the current economic

situation, and the considerable administrative and IT change that

implementation proposals will require.

To avoid duplication, if the sub-group is to work further on these issues, it

should meet or liaise with other relevant groups and bodies, including: (a)

DJEI Labour Market Policy Unit; (b) FAS; (c) Forfás; (d) the ESRI; (e) the

Expert Group on Tax and Social Welfare.

Improve awareness via a campaign to inform unemployed people of their

entitlements if they return to work.

Time limit for PTJI should be reduced from 15 months to 11.

Principles A day of work is better than a day on benefits; this is true for employees,

employers and the economy;

The system should incentivise employers to take on part-time workers and to

increase hours worked when possible; workers should be incentivised to take

up work offered;

It is essential to make it as easy as possible for people to take up work, to

move in and out of work; there is currently a clear disincentive for people at

15 hours / 3 days to take further hours;

Awareness is important; the unemployed, employees and employers need to

know what schemes are in place.

Background 433,000 recipients of Jobseeker’s Allowance and Jobseeker’s Benefit


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An estimated 80,000 casual worker of which 40,000 are interested in more or

full-time work

Jobseeker’s Benefit is generally a flat rate payment for anyone who qualifies,

Jobseeker’s Allowance is means tested.

To qualify for Jobseeker’s Benefit you must be unemployed for three out of

six days (Sunday will be counted as a day from January 2013).

Any amount of time spent working on a given day counts as a full day

worked; if you work 2 hours per day over 5 days, no payment.

Part-Time Job Incentive Scheme (PTJI) allows unemployed person to work

and get paid for less than 24 hours per week and receive a special allowance

of €119 instead of Jobseeker’s payment.

Most agree that the system is outdated and needs to move to an hours based

system.

In times of massive unemployment, part-time employment should be

considered a viable alternative.

The JobBridge Internship scheme has been introduced, whereby recipients of

Jobseeker’s payments are entitled to an extra €50 for working in companies

registered with the scheme.

Employer Issues 3-day week

Short-time working was introduced as an interim measure and was never

intended to go on for so many years; it now needs to be revised to improve

the incentives for people who wish to work longer hours, and employers who

wish to offer longer hours.

Workers can be reluctant to return to four or more days’ work, from three

days, when this will mean losing benefits.

Employers are saying that they’ve got more work but that often employees

don’t accept an additional day if this means losing an entitlement to benefits.

If anything the system is even more difficult for employees to navigate-

shouldn’t we make recommendations that work for employees and employers

– e.g. it should be possible to 1) taper withdrawal of benefits on a .5 basis

i.e. for every 2 euro (net) 1 euro is withdrawn 2) suspend benefits – one of

the biggest issue of concern for workers is the sheer amount of

time/effort/stress involved in applying for benefits and entitlements so it

would allay concerns if they were able to suspend benefits for periods while

extra hours were available and then restart when hours are cut back;

The employee should be required to notify DSP of hours worked per week

and the employer can approve this.

If this were done online, it would make the process simpler.

Hours-based work week

We now have a 24/7 work week and the Social Welfare system hasn’t yet

caught up with this reality.


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The policy is to support full-time employment; but the system must be more

flexible.

An hours-based week, rather than days, would make the system much more

flexible and fairer across a variety of working patterns.

Administration

Employers who wish to hire someone for a day have to fill in all the Revenue

forms; Revenue and DSP have to be integrated to cut out any unnecessary

duplication; it is understood that Revenue and DSP already share

information; why are they not better integrated? “The Xs and Os form is a

complete nightmare”, one participant stated.

According to employers, DSP information requirements don’t fit in with

monthly payroll schedules.

A meeting between DSP operations people, Revenue, CSO and payroll

companies should be arranged to discuss how to align public and private

sector processes more effectively.

An online system, connected to the Revenue system, would make many of

the involved processes simpler and faster.

Definition of Long-term Unemployment

Employers have reported that having found the right person for a particular

job, and offered the job, they then discover that the person will not qualify

because not out of work for more than a year.

Employee Issues Employees can be worried that if they move from three to four days of work

and lose their benefits, they might not get back on again; therefore

employees can be reluctant to work more than three days even when it is

offered. ISME currently gets at least three calls a day from members about

this issue.

DSP / Policy Issues At an operational level DSP wants to continue to make procedures better and

more efficient; there is a 2006 DSP Report on this, some of the

recommendations from which are in train; however, the volume of work here

is probably not appropriate for a sub-group of the HLG to go into in detail.

A separate policy issue is that job-seekers’ benefit is for people seeking full-

time employment; there could be 50,000-100,000 people in part-time

employment, not seeking full-time, who are not now eligible for benefits for

this reason. It would be essential that any change made would not increase

the live register even more by making such part-time workers eligible.

DSP focuses resources on the long-term unemployed because their chances

of reconnecting with the labour market are so much lower than those out of


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work for six to twelve months or less; those only recently unemployed are

quite likely to find another job relatively quickly.

The difficulty with supporting people who are working part-time is that it can

start off as an interim measure and then become a permanent pattern, where

people are no longer looking for full-time work, but working part-time and

claiming for three days’ benefit. DSP policies like this tend to become

ingrained into the structure of the labour market.

It is a misnomer that those on social welfare payments are well off; a basic

payment is around €180 per week, while a minimum wage job would pay

around €320. At the same time, it is not legitimate to choose part-time work

supplemented by benefits. As stated, job-seekers’ allowance is for those

seeking full-time employment; it is not intended as an option for those who

choose to work part-time; nor is it intended as a supplement to employers’

wage bills.

Note that only 13% of people on the live register also receive rent allowance, so the replacement ratios are quite low, in general; see the recent ESRI

report. Less than 5% of people experience negative replacement rates; this could be as low as 3%.


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7. Health & Safety Issues Report

Chair: Frank O’Donnell. Print Depot

The following six issues were considered: (HLG suggested solutions in blue.) Frank O’Donnell and Don O’Connor met representatives from IBEC, FAS, HSA,

H&S Policy Unit, DJEI, and D Education in May 2012 to discuss the Health & Safety issues (Items 1-5); item 6 was clarified bilaterally with Enterprise Ireland.

1 Health & Safety - Safe Pass not valid for long enough. Increase validity to at least 10 years – a refresher pass could be completed online. No need for full day course on basic common sense given by people who

have never been on site.

2 Safety, Health and Welfare at Work (Construction) Regulations, 2006 : defines “construction” as including any work to a structure meaning that much more than the traditional Construction NACE Codes are considered as “construction” and covered by these regulations, requiring specific

documentation and specific training (only available through the FÁS). General refurbishment /routine tasks could require training and production of

extensive documentation which duplicates documentation produced under general employer’s duties and other H&S legislation. This also presents difficulty translating some provisions to circumstances outside of a traditional

construction site.

3 Training provisions can only be completed through FÁS; This training burden results in additional costs and delays to employers.

Recognise equivalent qualifications from other EU Member States.

4 Safety, Health and Welfare at Work (General Application) Regulations, 2007: employers must perform an individual assessment at each and every workstation. This could mean hundreds of individual assessments which

take 30 minutes to do on average.

Modern office furniture is designed to comply with the minimum provisions of the

legislation: allow purchase records of compliant furniture to be used in conjunction with existing H&S assessments to show compliance.

5 Safety, Health and Welfare at Work (General Application) Regulations, 2007, Display Screen Equipment: eyesight tests.

An employer is required to make eyesight tests available to all employees who

use Display Screen Equipment (DSE). However, there is no medical evidence that use of DSE causes deterioration of eyesight. The administration to establish a testing regime, communicate it to employees, record their attendance,


82

reimbursement for, time off work, etc., can be considerable, particularly for

medium to large sized enterprises.

6 Simplify R&D Funding Drawdown process under the RTI fund. Currently with each tranche of a grant, EI requires that a firm must have each claim audited prior to EI sending in another auditor to check once more. This is a significant cost for firms engaging in R&D.

We would suggest that the profile of how paperwork is completed could be simplified to reduce the audit requirement to one external audit at completion

with no need for an ‘internal’ EI Audit beforehand.

The outcomes from the meeting were as follows.

1 “Safe Pass not valid for long enough” The sub-Group learned that the Fas Safe Pass programme was developed

following an initiative by the Construction Industry Training Committee (CITC). This initiative was incorporated into the Construction Safety Partnership Plan

which was launched by the Minister for Labour, Trade and Consumer Affairs. Detailed consultation took place between FÁS and expert working groups

representing the social partners with the support of the CITC. When the CITC came to the end of its term it was replicated by the Construction Industry Group and further replicated by the Construction Advisory Group now chaired by an

ADG from FÁS.

As part of the development process the frequency of renewal was incorporated into the CSP Plan. The course continues to develop and is now in its sixth iteration. A suggestion, such as this one, to extend the validity period, should

therefore be submitted to the Construction Advisory Group now chaired by an ADG from FÁS.

It appears that a good deal of the demand for Safe Pass courses arises from the industry itself, with project supervisors insisting that any workers on site should

have completed the course.

The cost for the one-day course is €80, but sometimes it is as low as €13 when a walk in rate is negotiated. Many of the participants pay for themselves; FAS also funds many of the courses.

2 Definition of Construction It is considered that the official definition of construction covers a broad range of

activities not traditionally seen as construction; this means that Safe Pass and other training must be completed in respect of these activities, raising industry

costs. The sub-Group learned that this definition arises from EU regulation, and that specific guidance has been sought and received on this, confirming that it cannot be altered without changes to EU regulation. A review of H&S regulation

at EU level will take place in 2015 and industry will be consulted for their inputs at that time.


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However, work is on-going in Ireland to review construction regulations,

focussing on reducing administrative burdens; it is envisaged that a number of Information Obligations will be removed as part of this process.

3 Training “only available through FAS”

Training is provided by external providers and construction companies who have

an in house accredited Safe Pass Tutor FAS is the regulator of this activity. Recognition of other qualifications is already set up. In 2011, 22 applications for the recognition of qualifications from other MS were processed. Even still,

employers tend to insist that Safe Pass is attended by their site staff.

Recognition of EU Qualifications It should be noted first that Safe Pass is a Health and Safety Awareness Training course. Mutual recognition agreements are in place with UK and NI; information

is available from the Department of Education: http://www.education.ie/home/home.jsp?pcategory=28966&ecategory=28966&l

anguage=EN Equivalent awareness programmes to Safe Pass are not provided in most other

MS, but there is a “twenty-day rule” under which foreign workers may work on site in Ireland for 20 days before being required to complete a Safe Pass course.

The meeting was advised of the categories of workers to whom Safe Pass applies, as provided in the Safety, Health and Welfare At Work (Construction) Act, 2006.

The option to convert Safe Pass to a qualification (rather than an awareness

programme), thereby potentially aligning it with more EU qualifications, is considered to have the disadvantage of creating a barrier to many construction workers who may have concerns about the consequent requirement for an

exam. A written exam was used historically, but substantial literacy problems were encountered.

4 Risk Assessment on Workstations

Industry representatives contend that given the flexibility of workstations

(desks, chairs, etc.) a generic risk assessment should be adequate to cover an office environment, rather than requiring the carrying out of individual assessments at each workstation. Workers could, for example, follow guidelines

provided, say via a computer programme.

The relevant EU Directive is very clear, however, that it is the employer’s responsibility to carry out the risk assessment, and that it must be done

individually for each workstation. The European Commission has provided legal interpretation in relation to this point.

The use of “dynamic risk assessments” will not suffice in the absence of an underlying RA. Dynamic risk assessments tend to relate to specific jobs, the

general RA having already been carried out in relation to the working environment.

http://www.education.ie/home/home.jsp?pcategory=28966&ecategory=28966&language=EN

http://www.education.ie/home/home.jsp?pcategory=28966&ecategory=28966&language=EN


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5 Eyesight tests

A legal requirement under the Directive, and may not involve workers in any

additional cost; therefore the cost falls on employers. A clarification was requested as to whether employees with PRSI entitlements to have their eyes tested could avail of this rather than requiring the employer to pay. The

Department of Social Protection has confirmed that: “under the Treatment Benefit Scheme (Optical), sight tests for VDUs, driving licences, etc., are not

covered.”

6 “RTI” Funding Drawdown

With effect from 01 January 2011 grantees are no longer required to submit an accountant’s report for R&D claims where the following criteria have been satisfied:

The grantee is an SME; The approval (as defined*) does not exceed €250,000 in grant; and

Enterprise Ireland reserves the right at all times to request the company to submit an Independent Accountant’s Report where deemed necessary.

* “An approval is defined as the sum of all projects approved at a committee meeting for Training, Capital and R&D projects.”

Recommendations

The clarifications provided have resolved the majority of the issues raised.

It is recommended that those already eligible for eyesight tests under PRSI, for long and short distance, should also be eligible for middle-distance tests, relevant to VDU use. The Department of Social Protection should be asked to

facilitate this.

The High Level Group has agreed that a meeting with Employee representatives from the construction sector will be arranged to discuss the issue of extending

the time period for Safe Pass.

http://www.citizensinformation.ie/travel_and_recreation/motoring_1/driver_licensing/full_driving_licence.html

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