Affordable Child Care Scheme: Discussion

I welcome the Minister, Deputy Zappone, and her officials from the Department of Children and Youth Affairs: Ms Bernie McNally, assistant secretary; Mr. Toby Wolfe, ACS legislative and policy and communications team lead; and Ms Marion Martin, ACS project management and business and systems lead. From Pobal, I welcome Mr. Jerry Murphy, director of programmes, and Mr. David Burke, early years head. I thank everyone for taking the time to appear before our committee.

As usual, I will read a quick note re privilege. In accordance with procedures, I am required to draw witnesses' attention to the fact that, under section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I remind members and witnesses to turn off their mobile phones or switch them to flight mode, as they interfere with the sound system and make it difficult for the parliamentary reporters to report the meeting. I advise the witnesses that any submission or opening statement that they make to the committee will be published on the committee's website after this meeting. I understand that the witnesses will make short presentations, which will be followed by questions from members. The Minister is under time pressure due to an engagement at 10.30 a.m., so she will need to leave.

Yes, but I have just made arrangements in case we need to stay.

We will keep moving. I ask that everyone bear in mind that the presentations and introductions should be brief. I am more anxious to get members' concerns onto the floor.

I invite the Minister to make her opening statement, after which we will have Mr. Murphy's opening statement.

Do members have a copy of my opening statement?

I will offer a summary of some of the key points before engaging in prelegislative scrutiny of the affordable child care scheme. I appreciate the fact that the committee was willing to meet me so quickly. It is good to be here with it, as I have always found this process helpful to our work.

As members know, there is an urgent need to address the high cost of child care. We require legislation in order to implement the scheme that we announced last year. Although it is critical that we get the scheme up and running as swiftly as possible, it is also important that we get the legislation right, in which regard I value the committee's input.

The affordable child care scheme is a landmark measure. It signals a comprehensive reorganisation of the various child care supports that have been offered by the Department and, prior to that, the Office of the Minister for Children. The funding that I secured in Budget 2017 will allow us to take a major step forward in terms of accessibility, affordability and quality. It will also assist in addressing my key concerns of supporting the objectives of reducing child poverty and enabling labour market participation. Although what we are putting in place now and the moneys that we secured for 2017 are only a first step, they represent a major leap.

One of the scheme's key features is that it is intended to be simple for parents, who will be able to apply online, and child care providers, in that once a subsidy has been approved, it will be paid directly to the providers on the parents' behalf. A great deal of complex work must be done in order to enable this simplification.

Another key aspect is the provision of subsidies with universal and targeted elements. This is the best way to offer a progressive approach to the development of a national child care infrastructure. For the first time, it will provide a degree of financial support for those facing the highest child care costs, especially for those with children under three years of age. That it will remove the stigma that can attach to targeted schemes is a key priority for my Department and me. The targeted element will focus subsidies on families with the lowest incomes, allowing them to receive the greatest benefit. We have placed a net threshold at a level that achieves the correct balance for the scheme's introduction. In this way, the subsidy is available for low-income parents. Those who receive the highest subsidy levels will be those under the relative poverty line. There are also commitments to targeted subsidies as we move up the ladder to middle-income earners. We are trying to get the balance right so as to take account of families' different socioeconomic backgrounds and concerns. This is a first step.

The subsidy is designed to wrap around school and early childhood care and education, ECCE, provision. It is important to remind members that subsidised hours of care and education will be either 15 hours or 40 hours per week. The standard 15 hours of subsidy will be available to all families regardless of whether the parents are engaged in work or study. The enhanced 40-hour limit will apply where the parent or parents are engaged in work or study. We are trying to make the definitions of "work" and "study" as inclusive as possible.

We have conducted extensive consultation on the scheme, most recently as last November, and have received more than 4,000 responses. There was a high level of support for the proposed scheme in those 4,000 responses. However, a concern was raised with the Department by parents and providers about the proposal that no more than 48 weeks of subsidy would be payable per year. This proposal would create funding difficulties for providers and would not fit with their business model of income coming in and costs going out on a 52-week basis. We have responded to this and adjusted the proposals accordingly, but I would welcome the committee's views on the matter. The adjustment allows the same amount of subsidy to be payable on a 52-week basis rather than across 48 weeks, so it is budget neutral.

Issues of quality, cost, provision, conditions and pay arise in our discussion of the Bill, so I will remind members that we will engage in an independent review of the cost of quality child care. What the legislation puts in place is an infrastructure through which we can continue investing as the years pass. It is accepted internationally that, if high quality services with the best outcomes for children are desired, then valuing the workforce is critical. The current terms and conditions for child care practitioners do not reflect the importance of their work. I have met them and we have engaged in the early years forum.

We have also met with Patricia King, head of ICTU, and other members of IMPACT and SIPTU. This is a key aspect of my priority to support the quality workforce in 2017 and with budget 2018 negotiations to ensure it can continue. The independent review is important and will help us determine the basis for the costs for child care provision.

The issue around the sustainability of community services is critical for me and my team. It has been raised consistently since we announced the portable child care scheme and as we are moving to put in place legislation. We are looking at ways of ensuring the support for these services. I acknowledge that the financial situation of many community services has been further stretched by the move to require FETAC level 5 qualifications of all staff who work directly with children. The impact is large for community services which previously relied on community employment schemes.

A large part of the financial challenge, however, is that community services face low revenue. The highest subsidy rate available under the community child care subvention is €95 per week. When we move to the new scheme parents may now receive a subsidy of between €150 and €205 per week, depending on the age of the child. We anticipate more parents will use child care, meaning more income will go into community services and accordingly supporting the business model.

As well as beginning work on the independent review of costs, officials in my Department are examining the potential to bring more child minders into the scheme while ensuring quality. A departmental group will discuss this with Childminding Ireland.

The Government wants to support all the ways parents choose to mind their children. For stay-at-home parents, we are reducing some of the barriers for those who want to move into learning paths and the workforce. At the same time, other Departments are putting in place supports for these parents. This will all come together in the first ever national early years strategy, which will take a joined-up approach, outlining how my Department, with the Department of Social Protection and others, will ensure parents have a choice in how they care for their children and are supported in this.

In parallel with the legislative process, officials in my Department and staff in Pobal are already working hard to develop the business processes and IT systems which will make the affordable child care scheme possible. That work involves close co-operation with officials of the Department of Social Protection and the Revenue Commissioners, as well as support from a range of other Departments and agencies.

In addition, preparation for the scheme has already involved consultation with a range of stakeholders. I thank all involved in that process to date.

I invite Mr. Jerry Murphy from Pobal to make his opening statement.

Mr. Jerry Murphy

I thank the Chairman and members of the committee for the opportunity to discuss the work of Pobal on the development of the affordable child care scheme.

Pobal was established in 1992 as Area Development Management Limited by the Government, with the agreement of the European Commission, as an intermediary company working on behalf of the Government to support social and economic development. Over time, our work has evolved in line with developments in government policy and the needs of the groups and communities we serve. In 2005, the company name changed to Pobal. The company is governed by a board of directors appointed by the Government who give of their time and expertise on a voluntary basis. Pobal's programmes are subject to audit by the Comptroller and Auditor General, our funding Departments and the EU.

Pobal now manages or administers 24 programmes on behalf of the Government. In 2016, we administered €428 million of funding. Our role varies across the programme we manage but includes working with Departments on programme design, funding allocations, contract management, beneficiary support, training and quality improvement, monitoring, reporting and audit.

Pobal has been involved in the development of early years provision since the inception of the sector. Pobal worked with the then Department of Justice, Equality and Law Reform from 1994 to develop community child care projects in disadvantaged areas through several initiatives. Pobal subsequently managed the EU co-funded Equal Opportunities Childcare Programme 2000-2006, the State's first national child care provision programme. We managed the State's National Childcare Investment Programme 2006-2011. We have since then worked with local communities, with the early years sector, with county child care committees and with the relevant lead Departments to support the sector's development and delivery.

Pobal works on a wide range of early years initiatives on behalf of the Department of Children and Youth Affairs. Our roles include administration of the various targeted subsidy programmes such as the community child care subvention and the training and employment child care programme; management of the early childhood care and education scheme process, support and oversight of county child care committees; the learner funds, hosting of the better start quality initiative and of the access and inclusion model.

Pobal's role gives it access to clear information on the structures, activities, successes and challenges of the early years sector. We are keenly aware of the impact on parents of the availability, or unavailability of good quality, affordable child care. We are conscious of the financial restrictions within which the early years sector operates and of their impacts on it. We are conscious of the stresses placed on both parents and on the sector through the complexity of existing systems for managing provision.

The affordable child care scheme, from our viewpoint, is a valuable and substantial move forward which can assist all stakeholders in overcoming sets of existing challenges. The new offer of financial support to all parents significantly broadens the base of those who can access State child care support. Moving to a single mechanism for offering targeted subsidies will make it simpler for parents to understand their rights and for child care providers to manage their provision.

Pobal is conscious of the need to ensure, as we move from the current complex structures to a more logical and unified approach under the affordable child care scheme, that the process of transfer to the new programme is well planned and supported. Pobal will, in partnership with the Department, work to prepare and train providers to operate the necessary new systems. Pobal is also aware of the need to work to ensure these new systems reduce, to the greatest degree possible, the bureaucracy on parents and child care providers. We will work to keep these levels controlled, subject always to the need to ensure proper public accountability for funds.

Our experience of working on existing early years provision allows us clarity on the scale of challenge and complexity in completing this work. We are committed to ensure this experience and the lessons learned are brought to bear on scheme design and implementation. A key feature of this challenge for Pobal is moving from working only with child care providers to also working directly with the tens of thousands of parents who will access this scheme. Other important challenges are to be met in regard to ensuring appropriate, high-quality and secure data systems, properly balancing accountability and simplicity and in preparing parents and the child care sector for the transition.

Since we were approached by the Department in October to take a role in the delivery of this scheme, our knowledge and understanding of the detailed challenges in the broad programme, as well as the necessary steps to meet them, have grown. We are particularly aware of the challenges presented by issues such as ensuring computations of family income are accurately addressed, where complex sets of situations will be encountered and will need to be dealt with.

Pobal has put in place a dedicated staff team to support the development of the new programme. This work includes developing new business processes to deliver the affordable child care scheme and an ICT system to support these processes. It also includes providing the sets of information, training and other materials needed to ensure parents and child care providers are prepared for the scheme's roll-out.

We are working closely with the Department of Children and Youth Affairs to ensure the affordable child care scheme programme is operational to a high quality standard and that the systems developed are helping to make this service a success for parents, children and providers.

I thank Mr. Murphy for his presentation and presence which are very much appreciated. The committee is aware of the enormous challenge posed to the Department of Children and Youth Affairs and Pobal in rolling out a scheme of this scale by September. Obviously, if the legislation is to move through and be agreed to in the Houses, I imagine it will have to be done by June or July. As discussed at our last meeting, the committee will do everything it can to assist that process and ensure there will be no stumbling blocks along the legislative path. If an attempt had been made to get a programme such as this through the previous Dáil, it would have had to be considered by the Joint Committee on Health. One can imagine what it would have been like in trying to find space in the work programme of the committee for a programme such as this at the time. It is an enormous challenge as the programme offers, I believe, up to €10,000 per year per child. If a family have two or three children, it could technically receive €30,000. Will the Minister clarify if the figure is €10,000 per child?

A maximum figure of €10,000 per child to support people in meeting child care costs constitutes an enormous step forward for us as a society. It is an extremely ambitious programme and the committee will certainly provide every assistance in meeting every challenge along the way to ensure we get the scheme right from the get-go.

Thank you, Chairman.

I thank the Minister and her officials for coming and giving us of their time. It is very important and appreciated that we have an opportunity to discuss the scheme. I have a few brief points to make.

The Minister said she wanted to have a system that was simple for parents and providers and that it should be available online. Will she tell the committee when exactly it will be available online? Parents are asking providers about the scheme and have questions about what it will mean for them. They want to know when they will be able to obtain information on it and the providers are not able to tell them because they do not know the answer. What briefings are being offered to providers, or when will they occur, in order that providers will be able to give the information to parents? Many people go to members of the county child care committees which act as a one-stop-shop with questions about child care services. Have the committees been briefed on the scheme or when will that take place?

The Minister spoke about the early years strategy. I believe it is the key to everything. For years we have had many systems of child care because we were not following an early years strategy. Will the Minister indicate when she expects the strategy to be published and implemented? Is there a timeframe or plan in that regard?

It is welcome that the Minister met the Irish Congress of Trade Unions, the Services, Industrial, Professional and Technical Union and IMPACT to discuss the pay and conditions of child care workers. It is important to have the worker organisations on board, but the reality is that if we want quality child care services, we need to treat child care workers with the respect they deserve. Currently, their pay and conditions do not reflect the very valuable work they do. There will be an issue about sustainability if the high turnover of staff in the sector continues. What schemes does the Department plan to introduce to address the issue of workers' pay and conditions, as it will be the next crisis? We rightly hear a lot about the affordability of child care, but another aspect of the matter is the way workers are paid. Many of them cannot even meet the cost of their own bills and the problem especiallyd affects women who generally dominate the numbers employed in the sector. Perhaps the Minister might also provide clarity on the figure of 52 weeks. Is it the case that the amount of money is the same but spread over 52 instead of 48 weeks?

I ask members to stick very closely to the scheme we are discussing. I know that there are a lot of related issues in the child care sector, but at this meeting we are specifically discussing this scheme, notwithstanding the validity of the other concerns.

I thank the Minister for being here. A lot of my questions will be directed at Mr. Jerry Murphy as they concern Pobal which was handed the mammoth task of delivering the programme as it has a lot of experience in that arena. My first concern is about the level of engagement it has had with the Department of Social Protection and Revenue because we are looking at individuals who are self-employed and also in the PAYE sector. What ICT system has Pobal acquired or sought to procure to ensure the required integration between all of the various Departments involved? That system needs to be delivered as staff will need to be trained how to use it. In a nutshell, will it be ready for use in September?

My second question relates to the affordability, accessibility and sustainability of crèches in rural communities throughout the State which are on a knife edge. The position is different from that in Dublin where people are queuing to secure places in crèches; in rural areas it is the opposite where crèches are driven by the needs of those in receipt of social welfare payments or participating in the back-to-education scheme.

I welcome the scheme which is a landmark in terms of the shift in child care, but there are huge hurdles to be overcome. I wish to pick up on one or two points made in the briefing document. One of my concerns is that the document states the change reflects the aim of the scheme to support labour market activation. I believe, however, that this does not apply in all cases. Some families do not come within that classification, but the best place for their child is in a community crèche. What will be done to support these families? For various reasons, the parents may not be able to work or may not be up to minding for their child. What funding models will be used to support these families? The current system is very compassionate in that regard. I believe some of that compassion is being lost.

The extension from 48 weeks to 52 is welcome, but I am concerned about the retention of staff in the child care sector because of the funding model used. What is being done to address the issue of staff retention in the sector?

In the interests of transparency I inform the committee that I am a director of a not-for-profit community child care facility. My question to the Minister is about the rural aspect of this matter. I very much welcome the scheme. It marks a shift, not only in helping parents but also in broader economic terms to facilitate those who need to find work. Is this about centralising child care services or moving people to the bigger centres? I know that many rural child care facilities help to keep local schools running. They are a conduit in rural Ireland. If that service can continue to be provided, schools will stay open. The automatic psychology is that the child care facility will act as a feeder for the local school, although it is not the only reason the facilities have been provided. It is, however, a knock-on effect and they breath life back into an area.

My second query is about qualifications. If I am off the point, the Chairman can flag it for me. Obviously, there are particular qualifications required. Will the Minister indicate if there is any thought within the Department for those who may have considerable experience in child care - I am talking about individuals with long experience - but who may not have the specific qualifications outlined by it? They may, however, have other qualifications that may be health-related. Has the Department looked at broadening the spectrum of qualifications to take into account the fact that there are people with long experience? Could a top-up examination or an assessment be undertaken based on the length of their experience? In rural areas especially we are talking about very small child care facilities provided by a person with extremely long service in child care who may have to take examinations. It will put pressure on their businesses if they have to hire someone with qualifications to look after them. Oftentimes it will not be commercially viable to do this. The extra workload involved in this regard should also be considered. Will the Minister indicate if any thought has been given to this aspect of the scheme? The point on vocational experience arose following the launch of other apprenticeship schemes last week. I wonder, therefore, if there has been any thought process on this aspect.

I welcome the delegates and thank both groups for coming. I also welcome the introduction of a single affordable child care scheme and the broad infrastructure, but I have concerns about the short time period and particular concerns about the fact that staff working in the sector are very badly paid. While they are required to provide quality services which is good and right, I am very concerned that there is nothing in the scheme that will increase the income of those working in the sector who, unfortunately, have to leave it because they cannot afford to work in it, despite being very dedicated.

In its submission the Association of Childcare Professionals, from which we will hear in the next session, refers to the draft scheme, stating efficiency can be achieved by combining part-time places through parental preferences, although parental preferences set limits on the ability to combine part-time places, and through managing staff resources at different times of the day and the year. Its concern is that in practice this could introduce zero-hour contracts and insecure hours for staff. Deputy Anne Rabbitte has already raised an issue about the figure of 52 weeks. I seek assurances for staff that there will be a recognition that they need to be appropriately paid and should not be on insecure hours. Many are and that is a real concern.

Can Pobal state why family income supplement is assessable under the scheme when it is not under various other schemes?

The explanatory note on head 3 of the Bill states:

The intention within the legislation is to provide for the total amount of subsidies available each year to be capped. When the budget cap has been reached within a given financial year, no further applications will be accepted unless and until additional monies are made available...

Does that mean that if somebody applies to participate in the scheme and the money has all been spent, the child will not qualify? It would be a source of serious concern if that was the case.

In head 6(1)(c) on approved providers there is a reference to "requirements that must be met by the provider in order to participate in the Scheme," in respect of quality. While I agree that quality is very important, what are the quality requirements?

As I understand it, for the preschool sector, all providers will be registered but for the at school sector, they do not have to be registered, yet they will receive State funding. How is it to be monitored? If there are problems, will a parent or a provider be able to take a case to the Ombudsman for Children?

The conditions for those working in the provision of child care are not directly tied to the provisions, but they are related. Deputy Kathleen Funchion has kindly offered her services as a rapporteur for the committee to prepare a report on that issue. The committee is concerned about it, but I am anxious to separate it from today's business - the early child care scheme. The delegates might bear in mind that I do not want to stray too far into that issue.

It is too narrow a focus for the committee to think child care will be provided by current child care providers because with the ambition of the scheme, they cannot do so. According to the figures I have, there are 20,000 people minding children. In the area I represent, Skibbereen, Clonakilty and Bandon, many of those minding children are relatives, grandparents, aunts and so on. There are also many childminders in the system who are unregulated. Tusla's figures show that approximately 120 of the 20,000 childminders are regulated by it. We need to rely on that cohort of people, but how can we bring them into the system and regulate their services? There is a provision for the Minister to do this, but will she elaborate on it to help the committee because capacity is a greater and immediate challenge? We have to acknowledge those who are already doing the job and ensure they will be able to avail of the subsidy the Government is providing.

I will give the initial response and then ask others to respond to the excellent questions asked.

A couple of members raised the question of pay and conditions. As the Chairman identified, many of these issues are outside the context of the Bill on which we are working. At the same time the legislation will put in place very different infrastructure and a way to provide for State investment to support families in the provision of child care, taking cognisance of the requirement for quality provision. As I indicated in my opening remarks, I am very committed to this and we are very cognisant of it. We have begun discussions that I think will prove very fruitful, not only with some of the unions which are bringing more child care providers into their membership, which is a welcome and important step that supports the appearance and status of the professionalisation of the sector. We will continue these conversations with them to help the Department in considering the issue of pay and conditions. I have referred to the independent review we are conducting. There are key places where we are having conversations because we are aware that the current pay and conditions are not adequate to acknowledge and recognise the quality care service being delivered throughout the country. The Department will continue to be cognisant of the inclusion of as much support as possible in respect of the learner funds and increased support for the providers in respect of their additional qualifications which is a key aspect of conditions, as well finding ways to support members of staff who have been involved in community services such as community employment schemes and want to move towards training to obtain the qualification required to ensure quality. These are matters we will continue to discuss, perhaps in other arenas. It is welcome that the committee is preparing a report on the issue. We, too, are doing work to provide me with support, as well as the argument and evidence, to look for more resources for child care providers, in addition to moneys for non-contact time. Members are aware of this key request from the sector in the context of the last budget.

I will ask one of my officials to address Deputy Tom Neville's question on qualifications and acknowledging the broad experience many providers have acquired outside the context of formal qualifications, particularly in early childhood care and education. The Deputy will be aware of our drive to ensure quality and learning among those working with children. Ongoing theory and practice are provided and learning and training are offered in different ways in early years education and care.

The Deputy also referred to our announcements on apprenticeship models and other sectors. While the word "apprentice" may have some positive and negative connotations for different sectors, perhaps even in the early childhood education sector, it may worthwhile to consider this type of model in the context of work in this sector. Discussions on the issue are just starting, but as we proceed, we will be very open to this approach. The legislation provides that certain qualifications are required in the sector. We are open to considering other approaches, however, and fully cognisant of the concerns raised by the Deputy. Deputy Anne Rabbitte referred to rural areas where some of these issues arise more frequently among providers than in cities.

I have said a great deal about pay, conditions and qualifications. Before asking my officials to elaborate on these issues, I will first address a couple of other matters. Deputy Anne Rabbitte raised a number of issues about parents who choose to care for their children at home. She asked if there was some compassion missing in the application of the scheme. That is not the case. The scheme provides a new subsidy for children aged under three years, regardless of circumstances. Many parents who choose to mind their children at home would also like a mix of care choices. Provision has been made for this and supports have been provided for 15 hours of-----

That was not the question Deputy Anne Rabbitte asked.

I was referring to children who were vulnerable because their parents might have mental health issues or other issues and might not be in a position to care for them. In such circumstances, the best place for the children is in a crèche setting. That is the point I was making.

My apologies. What was the Deputy's question?

The Minister is correct, however, that I used the word "compassion". I asked whether there was any compassion in the scheme to facilitate parents who were not in a position to care for their children. In such circumstances, the most appropriate solution is to provide care for them in a child care setting rather than at home. I am referring to vulnerable children.

To be helpful to the Minister, the Deputy's point is that this is not just about getting people into the workplace but that child care settings can be the best place for children in other circumstances, including circumstances in which the parents are not working.

I ask Ms McNally to respond.

Ms Bernie McNally

This issue certainly spills into the scheme. We will fund the full-time care in services of certain children, often Tusla referrals who may come to us via public health nurses or from elsewhere. While the purpose of the scheme is to cater for parents who are working or in training, where a parent or both parents may be at home, there is another allowance of 15 hours of subsidisation, as opposed to the full 40 hours. The policy allows for 15 hours of subsidisation to meet child development needs. While I accept that this is less than that available under some of the other schemes, careful consideration was given to this issue. While we know that 15 hours of care in services is good for children, there is less evidence in respect of longer hours. From a policy perspective, we believed it was in the best interests of children to provide for 15 hours of care. As I indicated, however, exceptions apply and Tusla, the sponsor, can support the Department to provide services for a child where public health nurses, social workers or others believe he or she requires such support for child protection or child welfare reasons.

That answers my question.

I thank Ms McNally for that reply.

On Deputy Kathleen Funchion's question on the early years strategy, we had an open policy debate last December and it is feeding into the strategy which we hope to bring to the Government before the summer recess, following further consultation.

I ask Mr. Wolfe to address the questions on family income supplement and the budget cap.

Mr. Toby Wolfe

Deputy Jan O'Sullivan asked a question on family income supplement not being excluded from income sources. I will make two points on that issue. This refers to included income on equity grounds. The starting point for the income assessment is that all forms of income are assessed. We have excluded certain specific payments, primarily payments intended to support labour market access through education and training or time-bound short-term measures that support families into the labour market. Family income support tends to be given in the form of a long-term payment, rather than as short-term assistance into the labour market.

A second important point is that the scheme also provides for what is known as a multiple child deduction. This is a deduction from a family's income where there are two or more children. The rationale for the deduction is very much around family income supplement because the amount of supplement paid to a family increases significantly when they have two, three or more children, in other words, the larger the family, the larger the FIS payment. The multiple child deduction built into the affordable child care scheme has been set specifically at a level to offset the increase in payment of family income supplement the more children a family have. The FIS payment, to a considerable extent, leads to an adjustment in a family's income through that mechanism.

The deduction also affects other families who are not in receipt of family income supplement.

Mr. Toby Wolfe

The multiple child deduction applies to all families, but concerns about the interaction with family income supplement drove the calculations on the level of the deduction.

Ms Bernie McNally

The Minister asked me to respond to Deputy Tom Neville on the issue of qualifications. There are a limited number of other ways in which people without a relevant qualification may work in services. However, I reiterate the point made by the Minister that, in our view, it is good for children that they are looked after by a qualified workforce. There is broad agreement on this matter, as is reflected in the development of regulations in this area. There are, however, a number of exceptions. The Deputy will be aware that we have provided for a grandfather clause, under which some people who do not have the necessary qualification and intend to retire in the next few years may continue to work in the sector for a limited period.

Under level 7 of the new access and inclusion model, a range of supports are provided for access and inclusion. We are providing for a capitation sum of approximately €13 per hour for individuals who can come to a preschool room and support the preschool leader in providing an inclusive service for all the children in the room. Under the regulations, we do not require that such persons must, in every instance, have a level 5 qualification. The Deputy referred to a health qualification. He or she may have a health qualification, for example, because a child may have particular care needs. Some allowance is made under the access and inclusion model.

The Department of Education and Skills has responsibility for reviewing the courses on offer. It is important that courses feature RPL or recognition of prior learning. This means that where a person applies to take a course that features eight modules, it should be possible to reduce the number of modules to reflect other work the applicant has done. RPL is very important and the Department of Education and Skills is working with us and all education providers on the issue.

If I may interject, to clarify, Ms McNally is considering ways of using the experience somebody may already have in order to reduce the number of modules they would have to complete for a qualification and this would be in conjunction with the Department of Education and Skills.

Ms Bernie McNally

Yes, very much so. The Department of Education and Skills has a responsibility in that regard.

Is there a time when that may come on-stream?

Ms Bernie McNally

That is there already. When anybody applies to do a course, they should be able to say that they have done a course already and ask for a reduction in the number of modules they need to do. Recognition of prior learning, RPL, should be available as part of most courses. In some instances, the colleges, etc., will say that the course was relevant and they will give a reduction. In others, they will say it is not relevant or it was done too long ago.

Who makes the decision? Is it the college or the Department?

Ms Bernie McNally

The college makes the decision.

The specific college.

Ms Bernie McNally

Yes.

Is the criteria uniform across the colleges or is it different?

Ms Bernie McNally

I would have to ask the Department of Education and Skills exactly how that works. I imagine there is some variation with that.

With regard to community services, the Minister answered most of the question but we very much recognise the challenges faced by community services. The Minister has already mentioned the interventions we are making in that regard.

Another point it is important to make is that in budget 2017, and for the first time, the Minister got a small allocation of €1 million for a sustainability fund to help the Department develop a sustainability policy. It is hoped that the Minister will be making an announcement in the coming days on that. It is a small amount of assistance to community services that are struggling, particularly in terms of community employment where community employment participants are no longer able to be part of the ratios. Clearly, if services have people beyond the ratios, and we know many of them do and that it is very generous of them to do so, those people outside the ratios are not bound by the regulation requirements.

Deputy Jan O'Sullivan asked about efficiencies and the wording used in the heads of Bills, etc. In terms of what that means, we know that services that run a very good business model are already looking for efficiencies. They are trying to dovetail one child with another child. We have some early childhood care and education, ECCE, scheme providers providing services in the morning and now in the afternoon so that they can give full-day, full-week contracts. The affordable childcare scheme has been built in such a way that providers will be able to examine how they can dovetail children. Some children might be there for the morning, others will be after school etc. It is those type of efficiencies we are talking about.

The Deputy also asked about the quality requirements. Clearly, the regulations will be the fundamental requirements but also as part of the contract, and we have that already. For example, the existing contracts state that we require services to implement Síolta and Aistear. Most of the services are saying "Yes, we do" but that they need more support. That is something on which we are working. Last year, we funded an Aistear co-ordinator and a Síolta co-ordinator to work in the Department of Education and Skills out towards the services. There is a good deal happening with regard to providing more mentoring and support on Síolta and Aistear.

The Deputy also asked about school-age child care. Our regulations allow for regulation of preschool services. Currently, there is not any regulation of school-age child care but in terms of what we do, many of the school age child care services provide early years child care as well. The Tusla early years inspectorate inspects that service in its totality. It does not focus on the school-age aspect but on the early years aspect. We have allowed those services to attract State funding. Those services registered with Tusla that provide early years and school-age child care will be included in this affordable childcare scheme. The Minister, with the Department of Education and Skills, will soon publish a school-age child care action plan. We have a plan to bring in some of the existing stand alone school-age child care services that do not have an early years component. We are hoping that under the legislation the Minister will be able to make regulations so that it is not just those who are registered with Tusla who can avail of the affordable child care scheme but that she can also establish a list of services that need strict criteria that will also be avail of the scheme.

On the timing of that, would that be ready when the scheme is being introduced in September?

Ms Bernie McNally

Yes, that would be our intention.

The Ombudsman for Children-----

Ms Bernie McNally

I do not know the categoric answer to that question. We discussed it briefly, and we have to check it, but I believe the Ombudsman for Children should be able to examine complaints. It is something on which we will follow up.

I call the Minister.

There are one or two other questions I have not addressed yet-----

The second item on my list-----

Is it capped? I had asked about head 3.

Yes, the overall capped budget.

In other words, if one is too late ,one does not get in.

I will start and then-----

Or if there is not enough money, one is too late.

As the Deputy will appreciate, we have done a massive amount of work, particularly the man to my right, to estimate the demands of the scheme. We would be fairly confident that the amounts of money we have for budget 2017 will be sufficient for those who wish to avail of the scheme. We have placed a budget cap in terms of the overall scheme. That was partly our own decision but it was also requested by some of the other Ministers in discussions with them as being prudent. At the same time, we do not anticipate that anyone will be turned away but Mr. Wolfe might give more of the detail on that.

Mr. Toby Wolfe

I will add a couple of points to that. We are not anticipating that the budget cap will be hit. We have got our best estimates in terms of the likely level of demand and we believe the budget will be sufficient. There is uncertainty in introducing a new scheme such as this one. It is a radical departure from the way previous schemes were run, so there is some uncertainty in terms of the level of demand. The budget cap is a protection for the public finances in case demand far exceeds what we had expected. There will be a limit placed on the cost of the scheme but we will closely monitor the levels of demand. As soon as the scheme is up and running, we will, in the second and third years, get a much better picture of the way demand is developing.

The Department has also joined the ESRI's SWITCH research programme and the affordable child care scheme is being built into the SWITCH model at present. Work began on that last summer and it is ongoing this year. The work programme with the SWITCH model includes estimations of labour market response to this scheme. We are fairly confident that we will not hit the budget cap this year and we will get increasingly confident as time goes by. It is in place as a protection for the public finances and in the event that the budget cap gets hit, we will be looking carefully at the way prioritisation of cases and the queuing system works at that point, but we believe it is unlikely.

I want to address the questions from Deputy Rabbitte and Deputy Funchion on when the system will be available online, the concerns around working with providers and especially parents to ensure the appropriate information is provided and that there is awareness raising in terms of how this works, the level of engagement with the Department of Social Protection and the Revenue Commissioners as well as the need to train people to deliver all of that. That is all part of what we are currently working on. We are planning an intensive information and awareness-raising campaign for parents particularly but also providers with regard to understanding the system, how one goes about applying and how that works. That will be rolled out in the months prior to September and we have been working intensively on that from a communications perspective.

In terms of the development of the system and its readiness, Deputies will be aware that the path we have set ourselves is very ambitious. Delivering a child care system that will be fair and equal, especially for the sake of the parents, the children and the families, is not easy. A huge amount of work is taking place on that. As members will appreciate and as the Chairman has identified, the legislative timetable is tight, and I will answer the questions and then ask Mr. Murphy and his colleague to come in also, but the timetable is also tight in terms of the legal information and payment infrastructure we need to put in place.

What we are putting in place now will be there for generations of Irish families. We are extremely conscious of the need to get it right. I should say with that in mind that it is possible the systems will not be fully automated by September. This would place an administrative burden on the Department and on Pobal. We might not have a fully automated system that delivers everything by September 2017. As Deputy Rabbitte said, we need to integrate data from the Department of Social Protection and the Revenue Commissioners so that the system can calculate every family's net income and provide the subsidy they will receive. We need to test the information technology system rigorously to ensure it works in complicated family circumstances. We need to get it right. We do not want a system that fails.

Our intention is that parents will be able to apply online from the home or office computer. The universal payment for children under the age of three will be fairly straightforward because it will not require the same level of calculation as the targeted measure. The other targeted payments will require more work and might therefore take longer. Some applications might have to be assessed in a manual fashion while we are finishing the development of the new systems. It could be a semi-automatic payment. The intention is that the parents will apply. I expect that universal payments will be determined fairly quickly, but it might take a little more time for targeted payments to be determined. The bottom line is that families will benefit from September. We will get a much clearer view of this from the project board, which contains officials from the Department of Social Protection and the Revenue Commissioners, by the end of this month. I will be happy to follow this matter up with the members of the committee at that stage by clearly communicating how this is going to work. I guess I am saying now that regardless of what happens, our bottom line is that families will benefit from September. I will give way to Mr. Gerry Murphy and Mr. David Burke.

Before they come in on a number of specific questions that were asked about information technology and other matters, I would like the Minister to clarify something for those who are trying to get their heads around the new arrangements. Am I right in suggesting that when parents who want to apply or to test their eligibility go online and input their PPS numbers, the system put together by the Department of Social Protection and the Revenue Commissioners will recognise their details and will automatically calculate their earnings and determine their eligibility for the scheme? Is it the case that every family with child care costs will at least get the minimum subsidy - the universal subsidy of approximately €1,000 per annum - regardless of its income? Am I correct in the two points I have made?

I will respond to the first point made by the Chairman by saying that parents will be able to apply online. It is intended that this will happen from September. There will be two aspects to what they will be applying for. In the case of the universal payment for children under the age of three, the calculation that has just been identified by the Chairman will not be required. There will be no such requirement on the part of the Department of Social Protection because it will be a universal payment.

It will be paid to every parent who has child care costs.

Exactly. It will be a universal payment. It will be very quickly determined that an application is correct and a subsidy will be offered depending on the length of time for which the child is to be put into the child care centre. As members are aware, the targeted aspect of the scheme is increasing and will ultimately be determined by the net income threshold level. Information and calculations will need to be received from the Department of Social Protection and the Revenue Commissioners. It might take more time to calculate this from the beginning of September because it might need to be done manually in the initial stages. It is possible that the relevant part of the information technology infrastructure will not be fully, rigorously and completely tested at that stage to enable us to know it is right and will be good for everyone. That is what I am saying

I would like to ask a question about the 20,000 people with no qualifications who are minding children today. I refer to grandmothers, sisters, aunts and neighbours who have been minding children for years and years. Is it not correct to say we will need those people to provide child care into the future? How does this scheme propose to bring them into the system without requiring them to go back to college to get a level 5 qualification, which they will not want to do? Is there space for them in this scheme?

Ms Bernie McNally

As Mr. Wolfe mentioned earlier, we have looked at what we think the demand will be this year and next year. We believe there is sufficient capacity in the system at the moment. If the Government continues to invest in child care, we will certainly need to build capacity from 2018 onwards in formal settings and in the childminding sector. Childminding Ireland, which is the umbrella organisation with particular expertise in this area, even if it does not have exclusive competence in this regard, is looking at this matter. It is considering the question of whether grandparents and relatives always want to be treated as paid childminders. Some of them choose not to be seen as such. Childminding Ireland is looking at who should be defined as a childminder.

Just 120 childminders are currently registered with Tusla. It is possible that several hundred more could register with Tusla. We would be actively encouraging them to do so. Not every childminder is eligible to register. In order to have such eligibility, a childminder has to be minding three or more unrelated children in his or her own home. At least several hundred childminders could register with Tusla. We hope they will do so. While we want to look at a way to bring the other childminders in, we cannot put State funding into an area that is totally unregulated. We have asked Childminding Ireland to make recommendations to us on what a quality infrastructure might look like and on the minimum standards and criteria we might consider in areas like Garda vetting and paediatric first aid. The infrastructure in this regard must be of a sufficient quality to assure the Minister when she is making regulations and drawing up a list. We want to move towards statutory regulation in the long term, but we are considering what we can do in the short and medium terms.

I did not intend to mislead Deputy Jan O'Sullivan when I said we hope to have the regulations in place after the primary legislation is passed. I was not suggesting that we will necessarily open the doors immediately to childminders or to stand-alone school-age child care services. I expect it will take some time for them to build up to meet the minimum standards that will be required of them. I do not expect that we will be extending it significantly this September. I imagine that it will be more of a medium-term project.

Deputy Ó Laoghaire will be followed by Senators Clifford-Lee, Devine and Freeman.

I thank the Minister for this opportunity. As other members of the committee have said, this significant and historic scheme is welcome. There are concerns in relation to some aspects of it, however. The Minister said in her opening statement that 10% of people will not be better off and will require transitional arrangements. Who might be in the 10% group? What categories of children might be involved? How long would such a transitional arrangement continue for?

The Minister spoke about the community model. I do not require a response to this point, but I am merely seeking to put it on the record that, as the Chairman suggested, the necessary capacity to support the expansion of the scheme does not exist. It is very important for the Department and the Government to place a significant emphasis on capital investment in the community sector in the interests of expanding capacity. This initiative needs to have a substantial capital element. I suggest that the community and public end of child care provision will be absolutely crucial in this regard.

One of my biggest concerns relates to the cost of delivering child care and sustainability. Like Deputy Neville, I am a member of a board of a family centre. The Minister will not be surprised to hear me ask questions about the sustainability of community facilities. I raised this issue last summer, before this scheme was announced, in the context of the change in the regulations. I echo Deputy Rabbitte's point that early years education needs to be an essential part of this initiative. We should not confine our focus to job activation. While the provision of 15 hours might be of value, I am concerned that some people who previously enjoyed substantial numbers of hours of child care will miss out on those 15 hours because of the pressure that will be on spaces and because of the first-come, first-served nature of the child care sector.

I have significant concerns about those in the earliest years, those from nought to three. The ratios are obviously significantly lower in this regard. From nought to one, the ratio is 1:3. For one year olds it is 1:5, and for two year olds it is 1:6, whereas it rises to 1:8 from three upwards. I am concerned that, because of the nature of the ECCE scheme and the affordable child care scheme, ACS, many community facilities and probably facilities across the board will now focus significantly on the older cohort of children. I am concerned about this because it is from the ages of one to three that early intervention is most valuable. The investment in the first few years is of greater value in tackling disadvantage than the investment after three. It is not just about qualifications because this is about the capacity of the community facilities to take on staff. Some of them simply cannot afford to do so. While the subsidy from the ACS might be substantial in many respects, a facility must have adequate staff from the get-go to avail of it. Therefore, I emphasise the need for the provision of funding to ensure such facilities have the ability to take on additional staff now. This is absolutely necessary.

I will not labour points that have already been made. With regard to pay, the reality is that the scheme is budgeted for on the basis of pay of roughly €10.79 per hour. The living wage is €11.50 per hour, however. The budget is on the basis of low pay, therefore. It is worth putting that on the record. It is a fact.

A policy paper we received makes reference to maintenance payments being deductible. I understand from the submission of One Family that this relates only to legally enforceable maintenance payments. That could exclude many people who are very reliant on maintenance payments. They could find themselves in hardship on that basis.

The family income supplement was raised. I still have concerns about that. Parents could decide to work less than the 20 hours to obtain adequate child care provision. In many respects, that goes against the grain of what we are attempting to achieve on the labour market activation side.

The relevant tax year is going to be important in terms of calculation. I have slight concerns about that. It could be 2015 for some families, depending on circumstances. Circumstances could have changed drastically since then. I am not sure the model is necessarily the best or whether there are other possible models. There could be significant changes in people's incomes and their need for a substantial subsidy, for example.

On my final point, I am slightly unsure. Reference is made to the ability of sponsor organisations to ensure people get the full subsidy. We received a submission from Barnardos expressing concern that children in care would get only 15 hours under this scheme whereas they would have had many more hours previously. I seek clarification on that because a reduction in the number of hours for children in care would be a regressive step.

I thank the Minister and other witnesses for attending. I have a couple of questions, which I will keep as brief as possible. I wish to return to what the Minister said about the targeted scheme not being fully ready by September. Does that mean people will not be able to avail of the targeted scheme if it is going to be dealt with manually? Will it be available on schedule in September?

I wish to raise the issue of vulnerable children in homeless accommodation. Ms McNally said exceptions will be made. Do children in emergency temporary accommodation have, as a right, access to the child care scheme? The Minister might confirm that. Alternatively, must it be approved later?

I raised Garda vetting with the Minister in the Seanad when the scheme was announced. She said extra resources would be allocated for Garda vetting to allow childminders who want to register with Tusla to do so in time for the scheme. Have those resources been allocated already?

On head 8 of the Bill, particularly in respect of the types of income that will be taken into account and the incomes listed in Schedule 2, I am disappointed that rental income and other income from land and property will be taken into account. I raised this with the Minister in the Seanad previously. This is probably an urban issue more than a rural one. Many families are in rented accommodation and their former family home, which is no longer suitable for them, is rented out. The rent is subject to the normal taxation and universal social charge regime. It is not actually earned income. I refer to the families caught in the middle who are struggling to make ends meet. They are renting out the former family home, which they cannot sell because it is in negative equity, and are renting another home for their expanding family. They will not be able to avail of the scheme fully. This seems nonsensical because these are the families the Minister has been trying to support through the scheme. I would like her to address the reasoning behind that. If a family has rented out the former family home and it is in negative equity, why is the rental income taken into account when assessing eligibility to participate on the scheme?

As with other Deputies and Senators, I have very grave concerns over the pay and conditions of people working in the child care industry. The pay and conditions have a negative impact on the children because there is a high turnover of staff. This primarily affects the workers. We really need to address this urgently.

It was really fantastic to hear about this programme. My view is probably coloured a little because it is 20 or 30 years since I was parenting young children. In the good old days, to use that awful expression, there was no such scheme as the one under discussion. My view has also been coloured because this is really the first time I have heard about the scheme fully. It sounds remarkable. I ask the Minister to forgive my question if it is irrelevant. I am just dropping in at this very late stage. We all know about rental issues in respect of rent and subsidisation. There was an awful statement from landlords that those in receipt of a rent allowance should not apply to become a tenant. Could that possibly happen with the child care facilities, in that they might cherry-pick the children they want to attend?

Capital investment is an issue. Whether it is relevant to this Bill is another matter. Obtaining funding for facilities is certainly a significant issue. Another issue is that rental costs and mortgage costs are excluded in the assessment. The Minister might comment on the rationale for that.

Consider the funding for 2018. In a full year, the funding is in the region of €150 million. Am I correct about that? It is obviously very significant. I urge caution in this regard. Can the system be demand-led? If it is to be equitable and fair, we want to ensure everyone who wants to participate is eligible and that we will not run out of funding. Can making the scheme demand led be legislated for? This would ensure adequate funding. Obviously, I do not for a second take from the funding of €150 million because it is a massive amount. It is a question of ensuring that it is in place.

I have a supplementary question on the discussion on qualifying for a stay-at-home minder. What are the qualifications proposed?

It is envisaged in the legislation that the Minister will have the power to bring in regulations for that.

As Deputy Ó Laoghaire said, FIS is meant to be a labour activation measure. If it is neutral from the parent's perspective, it might make more sense for them not to work the hours. Will the Minister have another look at that? We should not take the incentive of FIS away completely. How will providers deal with the issue in September? How will they know how much to charge parents if the non-universal bit has not been clarified?

The Minister gave one answer but I am still hoping for a response from Mr. Murphy.

That is my fault for not bringing him in.

I have a concern over the fact that, while we are taking all income into consideration, we are not offsetting anything for mortgage or rent. They are among the biggest expenses that parents of young children have.

Mr. Jerry Murphy

The Deputy also raised a number of issues around the interaction with the Department of Social Protection and Revenue on the procurement processes we are putting in place to develop the ICT system, and how this affects timescales. A board now oversees the process and it has a series of working groups, one of which involves the Department, ourselves, the Department of Social Protection and Revenue. We are getting very high-quality support from the Departments and there is a commitment to making information available via transfers.

The Chair and many members have spoken about the importance of ambition. What we are trying to do is enormous. While some of it is visible, it is like an iceberg because the systems development, the processes and the business infrastructure underneath are enormous and very challenging. There is a balance to be struck between getting there and getting it right. Challenges around data protection are very significant.

At the moment a sophisticated system is in place to support early years and some elements of that can be plugged in, particularly in the short term. A significant piece of infrastructure needs to be built. There will be a portal where parents can enter and supply information which we will use to give directly to the Department of Social Protection and Revenue which will return information. There will be a black box behind the scenes which will do a computation without giving people access to taxpayers' records, and this will tell us what level of subsidy can be made available before being transferred back to the parent. There is another system that interacts with the child care provider because they will need payments to be made. We need to make sure that it all works properly and that citizens' data are protected. Until we get to the stage where we see that happening, we cannot guarantee any dates. There is a specific date for the universal payments, which is September, and we are absolutely sure about this because we can control that process. We will have to see the results of the tests before we can make firm commitments on the targeted payments. We are working as hard as possible to have them ready and we are aiming for September.

Deputy Funchion asked about training. Once we know what is happening and have the stuff ready, there will be intensive training with the sector.

I do not doubt that Mr. Murphy is working hard, but when Pobal came into being and we started supporting crèches, there were a lot of flaws. Are we going back to a paper-based system from September? How will we support the child care providers with funding if these systems are not up and running? I am sure this is a major concern to child care providers. Will the funds be based on numbers? How are we going to pay the people providing the service? I am very concerned about this.

Mr. Jerry Murphy

I share the Deputy's concern. We are not going back to a manual payment system and payments to the sector will always be automated. The question for us is the degree of automation that there will be at the start and when the starting point will be. We have questions to answer before we can give members details of the full set of components and when each component can be brought into place to serve both parents and the sector.

We have started the procurement process and have an ICT company in place to develop the architecture. There is a cooling-off period at the moment but it will be starting work quite soon. As soon as there is clarity on the non-universal elements, we will be able to be clear with the sector.

As a default position, when things go wrong, one has to rely on paper but there is no plan to revert to a paper-based system in Pobal.

Ms Bernie McNally

Mr. Wolfe might answer the questions on maintenance, the 90% figure, the tax year and the mortgage. Deputy Ó Laoghaire made a fair point about capital investment and the Minister will be seeking further capital investment as we have to increase capacity. She has already negotiated some capital for 2017 and hopes to announce that shortly.

Another question was on sustainability for children who used to get 40 hours but now only get 15 hours, and the risk to community services of reduced income. The affordable child care scheme will give a huge opportunity for increased income because there will be more people going back to work and availing of the scheme. We hope that, over time, it will increase income generation for services. Children aged up to three years are a concern for us and we have heard of cases around the country where people are focusing on the early childhood care and education, ECCE, scheme because it is guaranteed income. The affordable child care scheme gives higher subsidy rates which reflect those ratios and recognise that baby runs need a higher level of subsidy. We hope that the early years capital funding for 2017 includes some incentivisation and support for the under threes. In the past we have focused on ECCE.

Senator Clifford-Lee asked about vulnerable children in emergency temporary accommodation. The Minister announced a new scheme, sponsored by the Department of Children and Youth Affairs, so that such children can access the CCS scheme as it exists under the affordable child care scheme.

Is that as a right or do various assessments have to be done?

Ms Bernie McNally

It is broadly as a right. They have to go through a process but once they are supported by a sponsor, there are no particular strings attached to it.

I was also asked about Garda vetting. The Minister has given additional resources to Early Childhood Ireland, some members of which are in the Gallery, and officials have met Barnardos to determine whether there is a need for additional resources there. Senator Freeman asked about cherry-picking and we very much hope that will not happen. The schemes of the past could only be accessed by community services so the situation was, to some extent, one of community services versus private services, but we recently opened up the CCS to private services.

Several hundred private services are now providing those schemes. As the affordable child care scheme develops, the Minister's vision is very much that it will be the only show in town. We hope and expect that all services will sign up for it, particularly because of the universal element which will bring them all in. We will have legislation in place but we will also have contacts, built into which will be a requirement to provide inclusive services. We mean that inclusiveness in the broadest sense.

We were asked about fee policy and whether, come September, services will know what to charge. The answer is that they should because we will have told them. We have had the discussion about how we will do it. Certainly, we will be telling them what the subsidy is and they will already have published their fee, which will be stated. The total fee will be a certain amount less the subsidy we provide. The parent will pay the difference. That should be clear. As the Minister said, we will be working.

What if the parent does not know what he or she will be entitled to on top of the universal payment?

Ms Bernie McNally

As soon as we know, the parent will know. As soon as we have done the calculation, the parent will be told.

I want to conclude with the witnesses. I ask Mr. Wolfe to come in.

Mr. Toby Wolfe

We were asked about the 10% who will be worse off under the new scheme, who they were and what can be done. There are people who will benefit from the scheme. We are not talking about people who will get no benefit. However, there are those whose income is at a level where the level of payment the scheme will give them is a bit less than they are currently receiving. This relates in particular to people on the CETS scheme, which has the highest level of payment of the current schemes. People at those levels of income will still benefit from the affordable child care scheme, however. The scheme provides for what we are calling a "saver clause". As such, anybody on a current scheme at the moment of transition to the new scheme will retain the current level of payment for a transitional period. In the case of those people who are on the CETS payment by virtue of being on an education or training course, they will retain their current payment right through until the end of the education and training course that gave rise to their payment. They will never be in a position where they started a course expecting a certain level of payment but then find themselves stranded. That will not happen.

There was a question on maintenance payments and the statement in the policy paper that the only deductible maintenance payments would be ones with a legal agreement around them. There was a change between the policy paper and the heads of Bill. We had discussions with one-parent organisations on the issue and the heads of the Bill now have a much wider range of maintenance arrangements that can be deducted from income. As such, the issue the Deputy was concerned about has been addressed in the heads.

There was a question around the tax year being potentially 2015, the previous year, and that incomes might have changed in the meantime. We have tried to design a scheme which is streamlined so that when a parent applies, once the automated system is up and running, he or she will get an instant response. The way we are doing that is by using the most recent income data available from Revenue. That is somewhat historic, but one of the protections we are building into the scheme is to provide that, at most after 12 months, a parent's income will be reassessed automatically every 12 months. That is the maximum period for which an income can be out of date. We have also built into the proposals that if a family's income has fallen since the most recent data was available from Revenue, it can request an assessment based on current income. For instance, if somebody loses a job since the most recent data was available from Revenue, he or she will be able to request a manual assessment in which his or her current income is calculated. If someone is out of a job, he or she will then get the maximum payment.

A number of members referred to rent and mortgages. We are not proposing that housing costs will be deducted from income, either housing costs of a family's first home, whether it is mortgage or rent, or the housing costs of a second home. The cohort of families who will benefit from the scheme all, by and large, face significant housing costs. It is not that some face a housing cost and some do not. Large housing costs are common to the cohort. Clearly, there is variation in the level of housing cost families pay, but we must be clear that the scheme is intended to reduce child care costs rather than to function as a support for family housing costs. We were aware in the decision not to deduct housing payments of a risk of subsidising up to 39% of the difference between two families' housing costs through the affordable child care scheme. I take the example of two families with the same income level and children of the same age, but where one lives in a larger house with a larger mortgage payment. If the housing costs were deductible, the difference in the affordable child care subsidy for the family with the larger house could be up to 39% of the difference in the value of the mortgage. If we were to deduct housing costs, we would have to be clear that we were, in effect, subsidising the difference in mortgage and rent payments between families.

There was a follow-up question on family income supplement asking if we would continue to look at the issue. We will certainly keep looking at the issue. We want to avoid any unintended consequences for FIS recipients.

I am conscious that Senator Clifford-Lee probably did not get an answer.

I have to go to another meeting shortly. It was on people who have an income from a former family home which is in negative equity and who had to move out because it was too small for their family. That is a big issue in Dublin. That income should not be taken into account because it is offset against the debt.

Did we look at that specifically?

Mr. Toby Wolfe

I appreciate the situation in which families find themselves. I recognise that absolutely. The principle we have applied in the scheme is that all income sources are taken into account across the board. We are trying to be equitable in that. If the income comes from a second home, it counts as income. I was also just addressing the issue of whether the costs of housing should be deducted. We have to be very careful.

It is a separate issue. Many families in my constituency and right across Dublin and other urban areas only have that income. It is not on an asset, it is on a liability.

I would like to pursue this a little bit more. Perhaps we can have discussions with the committee and carry out a specific analysis of this.

It would be a very targeted measure where one could show it was one's former family home which is in negative equity and that one was now renting a new home.

It is a very valid point and one we have successfully flagged here. There is no difficulty with further engagement on it.

We will look at it in more detail and come back to the committee.

The committee will deal directly with the officials on that. Deputy Ó Laoghaire asked about children in care and the impact of the 15 hours.

Barnardos expressed concern that it would be in receipt of fewer hours. I was not entirely clear on that. There is detail there about sponsor organisations and the level of subsidy they receive. I would like clarity on how many hours people like that would be entitled to.

Ms Bernie McNally

It would depend on the age of the children and the circumstances. If Tusla is happy to sponsor a child based on particular needs, it can get full coverage. I need to look at that further to see exactly what children are being referred to. It is not necessarily all children in care who would benefit from this or seek it in the first place. However, there is certainly an allowance, as there is at the moment, for Tusla to indicate that some children should get full coverage.

Their conditions would improve if they were in receipt of child care.

I will give the last word to Deputy Anne Rabbitte. I ask her to be as brief as she can please.

I am conscious that we are running out of time, but I believe this is a major question. I wish to ask Mr. Murphy about funding. Next September, we will have the universal sorted but the target will not be. While we are not discussing staff conditions today, what will pay the wages is when we know how the funding will come through. What mechanism is being put in place? Are we front-loading in August? How will these child care providers know the funding mechanism because the ICT has not come through? Everyone is working really hard but child care providers want to know how they will pay the bills.

Can I be helpful? Just before Mr. Murphy answers that, I suggest that this is something we can come back to. Today is not the end of our deliberations on this. Today is not the end of this scheme or closing off any avenue. I appreciate that a tender has gone out and it is hoped to have a company appointed to do that. I suggest that Mr. Murphy can give his answer but very briefly. This is something we can return to in a month or six weeks without having any impact on the legislative journey. The committee would like to get an update on progress from Mr. Murphy in four to six weeks, which would be more appropriate. I ask Mr. Murphy to be brief.

Mr. Jerry Murphy

At that point we should be able to give the committee exact clarity and also the child care sector will have exact clarity. We can reassure people that with any transition the existing schemes are in place. The intention is to continue the funding of existing schemes until there is absolute solidity around the new sets of funding.

That is very welcome. I am sorry to be rushing it so much at the end. I thank all the witnesses for their engagement. From our perspective, the committee has agreed to do this pre-legislative stage today and try to examine it in detail as best we can. We are going to engage with other stakeholders after this. We will then ask the committee secretariat to do a report based on our deliberations here.

As I want to keep the legislative part of it moving on, I hope we can conclude the official pre-legislative scrutiny stage today. If there are any other questions that members feel were not answered, they should e-mail them to the secretariat and I will ensure they go to the relevant official. I will ensure they will have answers in full before we resume in two weeks. That facility is there for any members. I would like to have developed the after-school care questions a bit more, as well as the three-year and 15-year issues, but we can do that by e-mail through the secretariat. I appreciate that the witnesses will co-operate with us in that way.

Okay. Thank you very much, Chair, and thanks to the other members also.

Thank you all very much for your engagement. We will go back into private session for a moment.

The joint committee went into private session at 10.53 a.m. and resumed in public session at 10.56 a.m.

I welcome the following witnesses: Ms Teresa Heeney, CEO, Early Childhood Ireland; Ms Amy McArdle, policy officer, ECI; Ms Valerie Gaynor, manager, Creative Kids; Ms Marian Quinn, chairperson, Association of Childhood Professionals; Ms Claire Woods and Mr. Eugene Waters, national representative group of city and county child care committees. We have received apologies from Mr. Mick Kenny, chairperson of the Kilkenny branch of the Association of Childhood Professionals. I think he is having some difficulty getting here. I thank the witnesses for appearing before the committee to help with our deliberations on the affordable child care scheme.

Before we commence, I am required to draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I ask witnesses to please turn off their mobile phones or switch them to flight mode because they interfere with the sound system and make it difficult for parliamentary reporters to report the meeting.

I also advise witnesses that any submissions or opening statements they make to the committee will be published on the committee's website after this meeting. I understand that the witnesses will make a short presentation which will be followed by questions from members of the committee.

I invite Ms Heeney to make her opening statement, to be followed by opening statements from Ms Quinn and Ms Woods.

Ms Teresa Heeney

I thank the Chairman, Vice Chairman and other members of the committee for their invitation to speak about the new affordable child care scheme, which we will call ACS for the purposes of our conversation. It is a little shorter.

Early Childhood Ireland's policy and advocacy work is underpinned by the belief that quality for children, sustainability for both child care service providers and their staff, and affordability for parents are the three essential, interconnected pillars of a robust, functioning and desirable child care system. As such, for ACS to work it must address quality, sustainability and affordability together, and not one without the other.

Early Childhood Ireland welcomes the development of the ACS, which represents a significant change to the current structure of State-funded child care supports. We welcome the amalgamation of existing targeted child care programmes into a single, streamlined and, it is hoped, more user-friendly scheme. However, we think it is a mistake that the free preschool years are not yet incorporated into the scheme from the outset, though we understand the reasons behind that.

We welcome the principle of progressive universalism whereby ACS encompasses both universal and targeted elements that can be increased over time as additional State investment becomes available and where families and children in most need receive the greatest financial support.

We welcome the scheme’s stated objectives to promote a reduction in child poverty, positive child development outcomes, labour market activation and improved quality. However, it does not appear to Early Childhood Ireland that the focus of the scheme reflects the priorities in this order or that the scheme as currently proposed is capable of addressing all the objectives.

We believe that improved quality as a stated objective should be connected to the second objective of improving child development outcomes, particularly as the two are intrinsically linked.

Getting the cost model right from the start is imperative to the success of the scheme for children, families and operators and for the survival of the early years sector. Early Childhood Ireland is concerned that the affordable care scheme, ACS, is being rolled out before an independent review of the cost of providing quality child care in private and community settings consistent with the principle of ongoing professionalisation of the sector, as per A Programme for A Partnership Government commitment in May 2016, is conducted and published. This is regrettable, given that the cost model being used to calculate the targeted subsidies is based on the current unacceptable status quo whereby the majority of the sector is breaking even at best and the workforce is highly professional, low paid and employed on a part-time, 38-week basis. Maintaining this status quo will do nothing to improve the sustainability of services, expand those services or help the poor pay and conditions of staff, which has led to a staffing crisis whereby our members cannot recruit or retain the staff needed to comply with the regulatory requirements in the sector, never mind to expand. This crisis is being witnessed daily and our members' expansion in line with the introduction of the second free preschool year is being curtailed.

This should be a scheme for children with their best interests at the core of its design. Instead, it feels overwhelmingly like a scheme for and, in terms of labour market activation, about parents. Labour market activation appears to be the overarching consideration in the development of the targeted subsidy.

I hope the committee will indulge me in going off my submitted script and reverting to something that we heard at this morning's first session. We were concerned to learn that the automated part of the scheme as regards the targeted approach will not be ready for September. I must emphasise that this is a major issue. The introduction of ACS is a key aspect of the development of Ireland's child care infrastructure. We have gone from the potential of having a win-win scheme to the significant risk that parents' expectations will be raised by a communications plan and cannot be delivered upon by the scheme. We must be cautious about a communications plan around a scheme that is not ready so that it does not become a failed expectation or experiment at the outset.

We welcome the change from a 48-week a 52-week funding model, which we had suggested from the start, and we will continue to advocate on issues of concern to our members, many of whom we will probably hear about at this meeting. These issues are: the hourly subsidy and hourly fee; the assumption around parents' access to and competency with computers and technology; the administrative burden on services; the requirement on providers to police absences and changes in child care provision; and, most importantly, the inadequate cost model from the outset with no consideration for professionalisation.

We are scrutinising the heads of the Bill, the general scheme of the ACS and the revised FAQs and we look forward to working with the committee and the wider Oireachtas membership so as to ensure robust legislative scrutiny and that the scheme, when commenced, represents a move towards a model of child care that can deliver the best quality for children in their formative years, viability and sustainability for early years services and their staff, and access and affordability for parents to child care facilities and services.

I thank Ms Heeney. I invite Ms Quinn to make her opening statement.

Ms Marian Quinn

I thank the committee for the opportunity to discuss the single affordable child care scheme. The Association of Childhood Professionals, ACP, is a professional body representing practitioners in early years and school age care and education. We are a voluntary organisation and all of our council members give freely of their time so that we can fight for the profession that we value so much, but that is at the bottom of the pile when it comes to recognition, respect and remuneration.

We welcome the concept of a single affordable scheme. Such a scheme facilitates the streamlining of existing schemes and provides a platform for investing in early childhood education and care. Increased investment is important if we are to provide high-quality, affordable services to the children and families with whom we work. Given the focus of our association, we have reviewed the ACS from the perspective of the early childhood education and care workforce.

When child care was first offered outside of the family, it was generally provided by the woman who lived down the road and took in a few children to supplement the family income as she raised her own children. There were no requirements in terms of qualifications, regulations, inspections, observations, curriculum planning, continuous professional development, community involvement, etc. This woman kept the child happy, safe and fed, and then her job was done.

The vista of early childhood education and care is vastly different in 2017. The practitioner is now a professional person whose role extends beyond care work with children. Professional responsibilities include supporting the child and family during this critical stage of development and, as a result, the early childhood professional is now an early childhood educator, administrator, curriculum planner, researcher, cleaner, counsellor, communicator, parent coach, nurse and facilitator. The list goes on. As the CoRe report reads, "[Early childhood education and care] is increasingly expected to fulfil societal expectations regarding active citizenship and democracy, offering a strong foundation for lifelong learning, contributing to reducing child poverty, realising equal opportunities, and strengthening creativity and innovation in young children." The amazing thing is that all of these professional services and societal contributions are provided by capable multi-taskers who earn little more than the minimum wage.

The language of the draft ACS document reflects a serious disregard for staff working in early childhood education and care. At one point it states, "Efficiency can be achieved through combining part-time places ... and through managing staff resources ... at different times of day and different times of the year". In practice, this would require the introduction of zero-hour contracts and further reduce the job security of an already underpaid, primarily female, workforce. The ACP views this as contrary to the Government's stated objective of supporting the professionalisation of the early years workforce and increasing quality provision. It is well documented nationally and internationally that working conditions and pay are central to providing high-quality early childhood education and care. The quality of the relationships between the children and the workforce are a key indicator of high-quality provision. Attracting and retaining a professional workforce are vital if these relationships are to flourish.

The draft ACS document sets a subsidy rate based on current schemes available in early years. This assumes that current subsidies cover the cost of delivering schemes. As many recent reports have indicated, there are serious sustainability issues in many services, meaning that existing subsidy levels are generally insufficient to meet current costs of provision. There is no allowance made for increasing wages that arise as a result of professionalising the early years workforce. Qualification requirements have been introduced to our profession, yet subsidy rates remain at pre-qualification levels.

The wage rate used in the draft ACS document is €10.79 for practitioners, although this figure is likely to be reduced due to the Minister's announcement that the scheme will now employ a 52-week as opposed to a 48-week funding model. While this figure is slightly above the average rate currently being paid, it is still significantly below the living wage and will provide little incentive for attracting or retaining a qualified and motivated workforce. The most recent Pobal early years sector profile indicates that 18% of staff were working in their respective centres for less than one year. Pobal believes that this is an indicator of significant staff turnover. The report also states that more than half of the staff are aged between 25 and 44 years. This is the time when many are hoping to buy a home and start a family. Current pay and conditions will not support these aspirations and, as such, will result in a loss of professionals from the workforce or push them into poverty.

Providing a high-quality early years service requires significant planning, documentation and continuous professional learning. There is little provision for these in the costing for the ACS. If the Department of Children and Youth Affairs is serious about ensuring high quality, there needs to be adequate provision for this in the ACS document. The Department is committed to providing an independent review of the cost of child care, but it makes no sense that this review would happen after the ACS begins. True costs need to be established before the new funding model is introduced. Unfortunately, the early childhood care and education, ECCE, scheme has proven that, if a scheme is not costed properly before its inception, conditions will continue to deteriorate, as there is little Government appetite to redress the difficulties imposed on providers and their staff.

The draft ACS document makes reference to the use of an hourly rate for child care subsidies, thus encouraging providers to charge an hourly rate for child care. The use of an hourly rate is not consistent with sustainable provision and thus further endangers the security of the workforce.

The early childhood workforce is at breaking point and can no longer afford to deliver this level of service for the pay it receives. This and successive Governments are taking advantage of good people who are committed to providing support to young children and families throughout the country. It is exploitation, pure and simple. It has to stop. As one early childhood professional stated:

I wonder why I bother; I am often on the verge of tears with exhaustion and frustration. Then I think of how much I love my job and the incredible enjoyment and fulfilment I get from working with young children. The government, both past and present, are taking advantage of my commitment and of the commitment of hundreds of other early years workers. I feel a fool to keep going.

Many have to take on a second job and increasing numbers are making the difficult decision to leave the profession that they love but in which they cannot afford to remain. Car loans, mortgages, pensions and medical insurance are unaffordable. Employers struggle to take a wage themselves after they pay all of the costs associated with delivering high-quality early childhood education and care. Wage bills account for 60% to 80% of these costs even though many are on little more than the minimum wage.

The young children of this country have a right to high-quality early childhood education and care.

Their families have the right to societal support in rearing their children and the professionals providing this high-quality early childhood education and care and support have the right to be recognised, respected and remunerated for their work.

In the context of the workforce development plan for the early childhood care and education sector in Ireland, the then Minister for Children and Youth Affairs, former Deputy Barry Andrews, said, “The development of the ECCE workforce has been identified as a key 'pillar of quality' alongside sustained financial investment in service provision." He also stated, “The challenges are undoubted but the rewards are also clear; a better prepared, skilled workforce in our early childhood care and education settings will improve the quality of centre based early childhood experiences of our children and impact positively on the lives of the children and their families.” The document highlighted that, “National and international research has established that the skills and qualifications of adults working with young children is a critical factor in determining the quality of young children’s early childhood care and education experiences.”

Unfortunately all this rhetoric was followed by, “While issues such as the status and the terms and conditions of employment of people working in the sector-----

I must stop Ms Quinn. She is straying way beyond the scheme we are discussing. I thank her for her presentation. It has been circulated to members. I ask witnesses and members to please stay on course. We are here to discuss the proposed scheme. Notwithstanding the validity of the concern about the pay and conditions of workers in the service, that is not what we are here to discuss.

If that was the case, it should have been made clear. It is part of the budgeting for a scheme. I made that point previously.

I know, but I am taking the decision as Chairman of the committee and I am going to stay on course regarding what we are here to discuss. As I have said, Deputy Funchion has volunteered her services as rapporteur to produce a report on the issue. The committee is interested in the issue and my chairing today does not take from that in any way, shape or form. We are operating to a time limit and we must stay on course to discuss the topic before us, which is the early affordable child care scheme, as published. If we allow issues regarding pay and conditions and workers, it will do a disservice to the session I am chairing. I ask witnesses and members to respect it as we proceed. Is that okay, Ms Quinn?

Ms Marian Quinn

I have no choice, I suppose. I thank the Chairman.

Ms Claire Woods

I thank the committee for the invitation to appear. I am joined by my colleague, Mr. Eugene Waters. We represent the 30 national city and county child care committees, CCCs, throughout the country. We welcome the opportunity to bring forward our views on the new single affordable child care scheme to be introduced this year. The CCCs welcome the introduction of this national scheme, which will provide much needed financial support towards the cost of child care for parents. The targeted supports in the scheme for working parents will help remove one of the barriers to employment for many parents. Parents who qualify for these supports will have access to subsidised wraparound care on an annual basis. This will enable eligible parents to choose and plan the best care for their children for up to a maximum of 40 hours per week over 52 weeks.

The universal supports are a welcome intervention for parents who are not in employment. The new scheme recognises in particular the importance of child care services for children under the age of three. The parental choice aspect of the scheme ensures parents have freedom to choose the best care for their children whether it be a structured full day care service or a child minder in the home-care setting. The shift in the nature of eligibility will provide access to subsidised child care for many working families with low income levels who do not qualify for support under the current programmes such as the community childcare subvention, CCS, scheme and the training and education childcare, TEC, subsidy.

The streamlining of eligibility criteria will benefit both parents and child care providers. The benefit to parents in work or education will be that eligibility will be based on one clear process for one scheme instead of the current process, which uses a set of complex criteria for each programme, CCS, the child care employment and training support, CETS and TEC. CCS eligibility is based on the parent being in receipt of a social welfare payment. CETS eligibility is based on the course the parent is attending being recognised by the education and training boards, ETBs, as eligible for the subsidy. We expect this change to determining eligibility will greatly reduce the levels of administration for the child care providers, given that they will be required to have only one fee policy as opposed to one for each programme, which is the current practice.

While the new scheme will cater for existing programme users and bring a new cohort of working parents into subsidy benefit, there will be a small cohort of vulnerable children who will no longer qualify for subsidy support. In particular, children whose parents are unemployed and currently availing of vital early intervention supports from community child care provision. It is important that such cases are explored further to mitigate any possible negative impact on the welfare and outcomes for such children. An example is stand-alone community after school services in areas of high disadvantage. These services provide key intervention supports to primary school children helping meet their educational and social needs. Head 5 of the new scheme allows for Tusla to support children on child welfare or child protection grounds. Some of the children using the services will fall outside of Tusla’s threshold but most definitely require support.

CCI recommend policymakers consider alternative supports for these child care services providing supports to vulnerable families. Our UK neighbours operate targeted supports direct to early years services which are providing essential early intervention to vulnerable children. This type of support is not new to Ireland. Before the introduction of the current child care programmes, community services received block funding from the HSE to ensure that child care places were available to vulnerable families in need of support. These children were usually referred by the HSE team, for example social workers, community workers and public health nurses. Today, we have the Meitheal programme within the Child and Family Agency that is committed to supporting families where there would be a child welfare or safety concern. This service could be a vehicle for identifying the child care needs of a family and making a referral to support the child's access to the child care service.

CCI expects to provide an increased level of support to child care services in the area of financial advice and support during the transition phase of this new scheme. This will be necessary to ensure services can sustain themselves and remain open in light of the fluctuation in child enrolments as we move from a snapshot enrolment core funding model to the funding following the child based on parental income. The CCCs have well established systems in place to provide this type of support. For example, our recent work with community services to address the issues of reliance on community employment staff, supports this.

Members will have heard from some sectoral groups the call for support for parents to be assisted with online applications to the new scheme. These supports are already in place through the CCC structure. My colleague, Mr. Eugene Waters, will elaborate further on the supports provided by CCCs.

Mr. Eugene Waters

The CCCs act as an information hub for parents regarding current child care programmes. We publish a parent guide to child care programmes annually and there are regular updates on our websites and social media. We also provide one-to-one telephone support and, importantly, a physical presence throughout each city and county in the country. We provide hot desk supports to child care providers who do not have access to the Internet, reside in areas where broadband is poor or need IT support. CCCs have been increasingly dedicated to locally managing the administrative processes associated with the various schemes. CCCs have direct reach into all 4,500 child care services nationally, and, importantly, a county identity for parents.

The CCCs have remained focused on responding to local need but, equally, they have been very responsive to the implementation of a range national programmes on a consistent basis. Since the introduction of the programme implementation platform, PIP, the CCCs have supported over 4,500 early years services to access and administer their compliance requirements via this online system. This is often by way of one-to-one support on requirements such as fees policies, contract renewal and child registration. The new access and inclusion model, which was launched in June 2015, offered a multi-level, inter-agency approach to increasing access, inclusion and supports for children with disabilities to the government’s Early Childhood Care and Education, ECCE, scheme. During the development of the model, CCCs were involved in the development of all seven tiers of the model via representation by CCI on behalf of its membership. On commencement of the model, all CCCs have undertaken delivery of actions aimed primarily at levels 1 to 3 but also general information and support for parents throughout the counties. CCC staff members have received training of trainers in preparation for the roll-out of equality, diversity and inclusion training across the country, which is already under way.

CCCs have assumed responsibility from Tusla for the roll-out of the Always Children First child protection training programme for early years settings with a stated aim of ensuring staff from every service throughout the country receive accredited child protection training. The roll-out of this training is co-ordinated and delivered at city and county level by CCCs. More than 12,500 early years practitioners were trained by the end of December 2016.

We welcome the proposal that Pobal undertake the administration of the scheme in light of its existing and long-standing relationships with the city and county childcare committees and the child care providers nationally.

The value of a local delivery agent in the form of the child care committees, CCCs, working with the sector is an important building block for the sector and remains so. It is a cost-effective model for the local delivery of national policy. For example, the recent introduction of the expanded ECCE programme was supported by CCCs, which are working closely with the Department and local providers to confirm there remains sufficient capacity to cater for eligible children.

This approach has been further strengthened through our national network, Childcare Committees Ireland, CCI, which provides a coherent structure for various bodies, in particular the Department of Children and Youth Affairs, to plan and implement its national policy brief. CCI, as the national network, works closely with a range of stakeholders to ensure we put in place strong, effective systems to support parents with our partners, Pobal, the national early years quality development service, the Departments of Children and Youth Affairs, Social Protection and Education and Skills and the voluntary child care organisations. We look forward to supporting the successful implementation of the new scheme.

I thank Mr. Waters. As Deputy Rabbitte is under pressure and must leave by 9.30 a.m., I will invite her to speak first. Then I will call on Deputy Jan O'Sullivan and Deputy Ó Laoghaire.

I thank the witnesses for their presentations. It would be remiss of me not to comment on what Deputy Ó Laoghaire said earlier. The witnesses represent a considerable part of the child care workforce and they are focusing on staffing and finance concerns because that is part of the business model but it is separate to the scheme itself. It is important for that to be recognised and said.

It is amazing that the Association of Childhood Professionals, ACP, and Early Childhood Ireland, ECI, are on the one page, as it were, on the cost model and calculations in the sense that both groups said in their documentation and presentation that a review was not carried out in advance. I would like them to expand on the reason they see that as being a valuable tool. I am concerned when I hear a reference to zero-hour contracts because it raises the possibility of a race to the bottom in the child care sector.

The witnesses from the city and county childcare committees are very welcome. I was a big advocate of the group's attendance at this morning's meeting because it links into all of the child care providers around the country. There has been much talk about support but I am interested in hearing its representatives' perspective on the cost-benefit analysis because child care providers are running businesses. How do they view the sustainability of those businesses in the new model that is envisaged? I did not see the point addressed in the submission and I would be interested to hear the perspective of the witnesses.

I pay tribute to all three organisations for the work they do. They have already done research on the cost of provision. I accept the Chairman does not want us to stray into that area.

Ms Heeney raised an issue, unscripted, on what we found out earlier this morning. I am not sure whether the other two groups had an opportunity to follow the questioning of the Department and Pobal this morning on the issue of whether the IT systems will function appropriately for the targeted element of the new scheme. I find that alarming and I know providers will find it very alarming, as will parents. Is it possible that the universal element of the scheme will be rolled out? I know there is a transition for people who can stay on the older schemes if they are more beneficial. I would welcome the views of witnesses on the issue of which we have only become aware this morning. We will be dealing with the legislation as it moves forward and wish to reflect the views of people involved in the sector in terms of the capacity of the scheme in September and whether there should be some modification of that.

The other piece of information we teased out this morning relates to people not being able to access the scheme when the money runs out. I seek the witnesses' view on that issue. While the Chairman indicated that we are not to talk about the general problem of people working in the sector, there are elements of this scheme that touch on it. I quoted from the presentation of the ACP to the Department and Pobal this morning about the fear of zero-hours contracts and I was given an explanation by a departmental official. I am not sure whether the witnesses heard the response but it was said that it was just about facilitating parents who need afternoon sessions, for example. I would welcome more elaboration from the witnesses about their concerns that the scheme could lead to zero-hours contracts because none of us would wish to see that happen.

In terms of the child care committees, Mr. Waters spoke about dealing with the capacity of the system and that part of their work is to advise the Government and the Department on the capacity of the system in different parts of the country. I would welcome any comments he might have on his assessment of the capacity of the system to deal with the new scheme.

I thank all the groups for their attendance. This morning was the first time we got the opportunity to question the Minister. It is a pity we did not have the witnesses in first but that is the way it goes.

Reference was made to a review. Do the witnesses believe the scheme should be halted until the review is carried out? Have they received any information about the review from the Department, Pobal, the Department of Children and Youth Affairs or whatever the relevant organisation is and how it is planned to be carried out?

I accept what the Chairman said about not straying into the terms and conditions of workers but a report will be done and I hope we can follow that up with the organisations individually because it is a very important issue. I do not think these matters can be viewed in isolation.

I accept that we are not to go into too much detail on the issue but it is worth putting on the record that the scheme is budgeted for in a particular way, based on a particular wage, and the programme as currently structured requires low pay. That is a statement of fact and it is not outside of our remit to take an adverse view of that. As well as the rate of pay there is the potential for flexibility or zero-hour contracts. It is not beyond our remit to remark on that.

My first three or four questions are primarily for the ACP and Early Childhood Ireland and then I will ask one or two short questions of the child care committees. Reference was made to the fact that ECCE is not being incorporated from the get-go. Why do the witnesses believe that is the case?

I support what was said in terms of approximately 10% of administration costs needing to be factored into the cost of child care. A point that was regularly referenced previously about child care workers is that there were difficulties with people involved in the sector having to go to the Department of Social Protection during the summer months. Does this scheme improve the situation to some extent or will there still be a difficulty because people require fewer hours during the summer? What way is that likely to play out in terms of engaging with the Department of Social Protection on such payments?

Reference was made in the ACP submission to the effect that we should not be talking about hourly rates but should take a much broader view and consider a salary approach. I would welcome a comment in that regard. As things stand, given the first-come-first-served element of the scheme, how do the two organisations see this playing out in September? Will it be chaotic or just difficult?

The Minister made reference to the fact that the CCCs will administer a sustainability fund of approximately €1 million for community facilities due to changes in regulation. In my area the Cork committee has made a submission but it is not aware of whether it will get funding. A commitment has been given but the committee has not been able to draw down funding. It must be able to make preparations. When are we likely to see the commitments that have been made honoured so that committees will be able to draw down funding?

It has been brought to my attention that previously child care providers had a better sense of the funding they would receive.

They will now receive a lump sum and have to do a significant amount of administrative work to figure out how much exactly they are receiving for each child. They will have to calculate the rate of subsidy for each child.

I know that we are not supposed to go into it, but we must acknowledge that staff costs represent over 80% of the costs involved in the running any child care facility. Staff are low paid and terms and conditions are not the best. Other issues include retention, recruitment, education and non-contract hours. They have a direct impact on the quality and continuity of care for our youngest citizens, but I will say no more about the matter because we are not allowed to do so.

Do the delegates any views on a weighting to gear the scheme more towards urban centres where costs are significantly higher than in rural centres? I do not, however, want to be accused of leaving out rural Ireland.

Will the delegates expand on the position of vulnerable children who will no longer qualify for a subsidy and support? What are their numbers? Has this issue been addressed directly with the Minister? Has she taken it into account to make sure they will be included?

On the great ICT initiative which we all welcome, I reiterate that it not being available in September is significant in terms of its impact, the uptake and its seamless success. Not having it will result in there being many stumbling blocks and probably much negativity in the first instance.

Ms Teresa Heeney

A few months ago Early Childhood Ireland presented to the committee the report Doing the Sums: The Real Cost of Providing Childcare. I think it was included in its pack today. We engaged an accountancy firm to carry out an investigation into the cost of child care. I imagine that the information is quite similar to some of that the Department intends to gather to inform the affordable child care scheme. One of the key findings in our report was that the issues of affordability, sustainability and quality were entirely interconnected. As we know and Senator Máire Devine has just said, if there is a high turnover of staff, it has huge implications for quality. The reason there is a high turnover of staff is 14% of staff in early years services are on 38-week contracts and required to go on the dole during the summer. While I accept that we are here to talk about the affordable childcare scheme, it has, as Deputy Donnchadh Ó Laoghaire said, been calculated, costed and budgeted for on the basis of the minimum wage. Staff working in services are earning just over €11 per hour. If someone has a degree, he or she is likely to receive €1 more. That is the reality and the reason it forms an intrinsic part of this conversation. We cannot talk about the affordable childcare scheme without talking about the delivery mechanism. It must be recognised that parents and children are the beneficiaries, but they can only become the beneficiaries of the scheme if there are adequate staff and operators in the sector to deliver it for the Government. That is why it is a critical part of the conversation. Not talking about it is like the emperor having no clothes. In our document-----

I have to interrupt to clarify matters. Let me be 100% clear. My sole objective is to focus on the scheme. Incidentally, the Government is not the employer for child care providers. As a committee, we have acknowledged and set out in our work programme our desire to deal with the pay and conditions of workers. We could do so now, but to do it justice, I propose that we have a dedicated committee meeting devoted to it. That was the agreement heretofore and is why I do not want this engagement to be dominated by the issue. That is the ruling I issued earlier, but it has been challenged by most members to some degree in their contributions, something I respect and with which I have no difficulty. However, I do not want the message to go out that I will not allow a discussion of the pay and conditions of child care providers. I want to deal with the matter separately to treat it with due deference and diligence. I, therefore, ask members to broaden their scope. What we are here to talk about is the scheme.

Ms Teresa Heeney

To respond to Deputy Jan O'Sullivan's question, we know that the expectation of members of Early Childhood Ireland is that the parents who will be looking to participate in the affordable childcare scheme from September are already their clients, with whom they are already working. What we do not expect to happen is that the scheme will be announced and that parents will come knocking on the doors of services. I will ask Ms Gaynor to speak about this because she is one of our members who operates a service. What we know is that parents have heard something about the introduction of the scheme and want to know the details. That presents a very significant problem if the targeted element will not be available in September because parents are already booking their children into services on the assumption that the scheme will be available. For example, if a parent expects to have access to the targeted element in September and the calculation is not made until the January, will there be a shortfall? Will parents receive the money back and will it come out of the 2017 budget or the budget for next year? The fact that a manualised approach is to be used in making the calculation has very real implications.

Ms Valerie Gaynor

Parents using our service are asking questions about the scheme mainly because we are talking about it. When they say they are booking their children in for September, we tell them that a new affordable childcare scheme has been announced and that although we do not know the details, there may be a reduction in their fees. However, as providers, they expect us to be the experts and have that information available. It is very difficult to support families and parents if we know nothing about a scheme. Knowing about it in September will be way too late for us. There is a huge influx of ECCE children in September; therefore, the enrolment element must be looked at also. From a parents' perspective, the information needs to be available much sooner - by May at the latest - particularly for services that operate on a sessional basis and that operate from primary schools which may be closed during the summer. I work in a service that operates from a primary school. We also offer a full-day care service, but as many parents do not use our service during the summer, we close. Parents need the information before September.

Ms Teresa Heeney

Ms McArdle will answer some of the other questions asked.

Ms Amy McArdle

I will address the question asked by Deputies Anne Rabbitte and Kathleen Funchion about the cost model to be used. The difficulty we see with it is that the current figures and model underpinning the affordable child care scheme have been conceived on the flawed or inaccurate premise that the current financial models in the early years sector are working. We know that they are not on the basis of a report we produced entitled, Doing the Sums: The Real Cost of Providing Childcare - the committee has received a copy of the executive summary - as well as a report entitled, Breaking Point, produced by the South Dublin County Partnership, among others, that looked at sustainability in community settings. Unfortunately, the findings made in these reports have been referenced in support of the cost model the Department has used, but that is not what was intended. The message is very clear. We have found that the current financial models are helping to maintain the status quo whereby services, at best, break even - many are struggling even to do this - and highly professional staff are on low pay and employed on part-time and 38-week contracts.

There was a question from Deputy Ó Laoghaire as to whether this scheme had the potential to alleviate the numbers of staff drawing social welfare payments in the summer months. That will only happen if the funding is sufficient for staff to be maintained over a 52-week basis. Again, that depends on the funding that underlies the scheme.

Consideration needs to be given as to whether the scheme should be halted until the independent review takes place. It is extremely important. The success of the scheme will be hugely undermined and the survival of the sector will be called further into question if we do not get the cost model right from the start. What is really important about that independent review is that it actually states as part of the commitment in A Programme for a Partnership Government that it will be consistent with the principle of ongoing professionalisation of the sector. As the committee probably knows, we are striving towards a graduate-led early years sector, with 60% by 2025. In a Pobal report on a survey of the early years sector, only 18% of early years educators have a level 7 qualification or higher and this is all related to staff pay, poor pay and poor conditions. The ability of the sector to retain and recruit staff is intrinsically linked to the pay and conditions in the sector. Ultimately the success is undermined if all of that is not addressed and dealt with from the outset.

Ms Teresa Heeney

I want to comment on some of these points, Chair. For the vision of the affordable child care scheme, ACS, to be realised, it requires significant expansion. We in Early Childhood Ireland certainly have concerns that we do not currently have capacity planning infrastructure or workforce planning infrastructure. The existing early years infrastructure in the country, while already big and growing, is not sufficient to deliver ACS to all of the families to which it hopes to deliver. That requires the Department of Children and Youth Affairs and probably the whole of Government to look at what size they think the sector needs to be to deliver for all of the families it envisions being able to access the affordable child care scheme. It has to ensure that no existing services are displaced while developing a capacity plan. There is currently no provision for that in the form of new contracts or new entrants into the free pre-school year contract and potentially into the affordable child care scheme contract.

Currently we have a situation where there could be 25 services in Ennis, for example, and another ten could open without a point of view being taken about assessment of need in Ennis for Government-funded programmes. That all speaks to a need to develop a capacity plan and a definition of what we mean by our early years sector, what we want it to do for children and families and how we want to staff it and ensure that there are sufficient staff. When we have that capacity planning considered and policy developed, that will inform the development of a workforce planning strategy. Currently, while we sit here and talk about there being an issue with the workforce, the reality is there are not sufficient numbers of staff to deliver the affordable child care scheme. There is a huge crisis of recruitment into the sector and a huge crisis, as we heard earlier, of retention within the sector. The advent of the new regulations, where people have to have a Further Education and Training Awards Council, FETAC, level 5 qualification, has created an acute shortage of new entrants at level 5 but at the same time, because the salaries are so poor at level 7, people are leaving the sector. There is a real problem about whether or not we can actually deliver the affordable child care scheme because we do not know if we have enough staff. We do not have a workforce planning process.

Does Ms Quinn want to answer any questions?

Ms Marian Quinn

I will address comments and questions about the cost analysis. The draft document for the ACS refers repeatedly to decisions based on price-capping or whatever else about the cost basis being subject to an independent review. All the figures are estimates and guesses. Some are based on flawed evidence and some are based on more robust evidence. It acknowledges left, right and centre throughout that the decisions that need to be made and the proper investment is all subject to the independent review. It seems fundamentally flawed that the review is going to happen afterwards. It is as if one is saying one will put something in place for now and then get the costing right when one looks at it down the line. The difficulty with that can be seen with what I alluded to in relation to the early childhood care and education, ECCE, scheme. It was similar in that the figure was not costed in respect of the costs on a nationwide basis and for some people it was sufficient while for others, it made their services unsustainable. It has stayed since. It actually was reduced and then the figure was reviewed again and that reduction was changed. That has been since 2010 and it is now 2017.

The costs of delivering a service have increased over the years. We continue to talk about insurance having gone absolutely crazy. There is professionalisation, the cost of resources, materials, all of the things, as well as regulations that require more and more to be delivered for a higher quality service. Every single bit of that is right if one is looking for quality but it all costs. We have had seven years of having pretty much the same amount of money. One can throw in on top of that an increase in the minimum wage - as there should be - and we should not even be talking about minimum wage when it comes to this profession. We have all those costs across a seven-year basis, which has meant that scheme, which was eventually expanded, has made it more unsustainable for everybody who is in it and has compromised the level of quality that people can, want, and need to deliver. They still have to do it within that pot.

Our concern, and that of many people to whom I have spoken, is that we will introduce this ACS as is, because we will then see what can happen afterwards, where it can go and what level of investment is needed as it is a platform for the future. We are talking about the reality of now, however. We have been looking at that reality in respect of what happened with the ECCE scheme for seven years and with no sign of that changing. It got worse. Where will we be in another seven years? That takes us to 2024, 2025 or whenever for funding that would be available for increasing the model based on an independent review. We cannot wait. We cannot have that expectation or not know where or how things are going to be. At the moment we have people hanging on by their fingernails in terms of being able to stay open and to provide quality services and all that goes with providing those services. They are only holding on because they think that things have to get better. For years they have been saying that things have to get better.

Now we are finding that people are closing because they are going. It is the double-edged sword of professionalising in that people are saying hang on a second, I have this qualification, I will get extra, for example, as a support person in early years child care. People did not get into working in the early years sector because it was going to be a big money spinner or anything. They got into it because they want to deliver a high-quality service for the children and parents. That has been compromised and despite the fact that the ACS document talks about quality often, it also simultaneously makes references to working to minimum ratios and all of those things can impact on quality. If one has 11 children in a service and one provider with those 11 children, one can provide a service. If there is an extra staff member covering, floating, whatever, then an extra quality service can be provided. This is going for the minimum and we are aspiring for quality. That is a concern and that is why the cost analysis coming afterwards would be a big difficulty.

The matter of zero-hour contracts is a reality that we are facing. Page 105 of the ACS document refers to reducing staff members in times of low demand during the day, week and year in order to maintain high occupancy rates, and that is the concern. What happens if children get a bout of chickenpox? I do not know because we do not know the details of how this is going to work. If there is a bout of chickenpox, every provider will say that it will go through the service and it is down a certain number of children. Does that mean a staff member can come in on such a morning and be told to go home because the service will have fewer children and to not get paid because only a certain amount of money is available? It is a concern. Not having to sign on in the summer has the potential to make the job more stable. Again that is double-edged because there is the fact that if people are signing on for the summer, at least they do not have their child care cost, which is substantial. However, if they have a child care cost then maybe what they are earning in the service will not cover the child care cost for them in many cases. How will they manage to keep their family sustainable and out of poverty? There is a real fear about zero-hour contracts. For some places, it will be more a reality than others.

We do not have any information on the review, the cost analysis. We have asked when it will be rolled out. I do not know; other people might know more.

There was a question about why the ECCE scheme was not included from the start. I can understand the logic for not including it from the start given that it was such a tight timeframe to get the other schemes in place. There was so much difficulty rolling out the ECCE scheme, which was massive. I would not say it is completely bedded down; it is just about sorted. At least we have got one thing going right now after all the time. However, it would make sense if rolling out a scheme to have it all in there. That was part of the rush to get it out for September. As has been alluded to, there is a difficulty with that September date in terms of timeframe.

There is a big difficulty with the hourly rates. My colleague, Mick Kenny, has seen it already. He is managing a service in a seriously disadvantaged area. He is already looking at providing a sessional service, a part-time service and a full-day care service. Some parents have booked their high-needs children in for the part-time or full-time service because the children can get a meal. It is a warm environment for them and they are not getting that in their home environment for various reasons. So they are able to provide that level of support. If a parent collects a child early - for example, after 4.5 hours rather than five hours - that brings down his subsidy rate. Pobal is looking for that in its compliance audits. It is pointing out that on those days when the child is picked up early, it only counts as part-time, resulting in a reduced subsidy to the service, which means the food and heat and general support they provide for the children are threatened.

Regarding that hourly rate, how does one fill it? If somebody wants their child in for three hours and nobody wants the lunchtime space for whatever reason and then one wants them afterwards how does one fill it and how is one sustainable in that regard? It will create a difficulty with the rate.

There are higher costs depending on the geographical areas. That will be a really difficult challenge. We know that the people's cost of living and the costs for buildings are huge. How do we get the balance for that? If a figure in between is picked, some services will do well and other services will effectively close. As was alluded to earlier, it is really disappointing that the reports that are evidence in terms of the costing and this document are those that point to sustainability. This is what it currently costs to deliver per unit and it is unsustainable. Some of the services based on this cost structure will be closing in three months, six months or a year. That is the costing that is put in which would be a real concern for us.

Mr. Eugene Waters

I will answer Deputy Rabbitte's question even though she is not here. Regarding the true cost of child care and the issue of sustainability, it is important that the CCCs are here as a Government-funded support to the child care. We are not mandated in any way to speak for the child care services, which is what Ms Heeney and Ms Quinn do. The true cost of child care is subject to many complex variables in terms of the structure of the delivery, the geography and how providers offer their service. We will obviously await the outcome of the independent Department of Children and Youth Affairs review.

This not the first major change to child care. Previously, community services were in receipt of a staffing grant and that moved to the community subvention, which was a major shift in the model. Equally, the launch of the ECCE scheme represented a seismic shift. Over the years, the CCCs have had a long history of working locally within their various counties to support those services. They have built up robust and evidence-based tools that are used. They are used by the Department of Children and Youth Affairs in the context of the CE programme, in respect of which Ms Woods will answer Deputy Ó Laoghaire's question.

Deputy Jan O'Sullivan asked about capacity. As Ms Heeney mentioned, the majority of parents who may access this new programme are in situ. It is not all new parents. It is important not to underestimate the capacity within the scheme either. Just over a year ago the Government announced it had expanded the ECCE programme which increased the numbers eligible for the scheme by almost 100%. There would have been questions over the capacity in the sector to meet those demands at the time. Working with the services and the Department of Children and Youth Affairs, the CCCs were able to locally monitor whether there was capacity for that ECCE expansion so that no child who was eligible for the ECCE programme was unable to do that.

The Department of Children and Youth Affairs has been very responsive where the sector has identified small policy changes that are required. For example, the service providers mentioned that they needed to be paid higher capitation by room as opposed to by whole service and the Department of Children and Youth Affairs responded to that. Equally, there have been and continue to be capital investment programmes supporting the expansion of capacity within the sector.

Deputy Funchion asked if we thought the scheme should be held up while we wait. I am not mandated to speak on behalf of the earlier services because our role is in terms of providing support. I am not sure if everybody in the room is familiar with the PIP scheme where the service is used to register children, calculate payments, etc. As Ms Quinn said, that has taken time to bed in. However, it now calculates, for instance, how much subvention is available per child and when those payments are due. There is a schedule that works around any fluctuations in that. Services having had support have got used to that.

When that was first announced, there were great expectations for what it might do on day one. It has taken until day 101 to achieve some of that functionality. The CCCs did some of that manual paperwork behind the scenes to ensure the children were registered and the paperwork was done. Even if the interface of it was essentially IT-based, some of the functionality of it happened through a paper exercise. It would be a shame to delay the benefits of the scheme to parents, which people have acknowledged, when by working together and utilising the supports available, those challenges are not insurmountable.

I will ask Ms Woods to speak now.

Ms Claire Woods

Deputy Jan O'Sullivan referred to the IT systems not being in place. My colleague, Mr. Waters, has addressed that. There is a paper exercise and there is a transition period. We have just heard this morning that the target will not be ready, but a number of the working parents may already be in the system availing of the community child care subvention piece. There will be that saver year where they retain benefits. It is not ideal that the IT system will not be ready. However, the current system is paper based for parents anyway, whereas it is online for the child care services.

In regard to Deputy Ó Laoghaire's question about CE sustainability funding, that is finalised and is on the Minister's desk to be signed off. We expect to hear about that very shortly. Pobal has in place the mechanisms as to how that will be drawn down. It will be similar to any funding that is drawn down through the Pobal online system. Our colleagues from the city and county childcare committees are at a meeting this morning with the Department of Children and Youth Affairs to finalise those processes this morning. We are just waiting on the Minister to sign off on the funding.

In regard to Senator Devine's question about vulnerable children, we do not expect that to be a significant number. In my own county, we are talking about perhaps seven community services out of the 110 services in the county. They are services for children who will not meet the Hardiker model of child protection at level three for the current Tusla support, which is mentioned in the scheme. They come in at levels one and two, which is family supports. Their parents will not qualify under the current eligibility criteria, that is, they are not in work or education. We are not talking about a significant number of services but they provide significant supports to vulnerable children. There are models and ways of working with that. Historically, there have been supports, through funding directly to community services, for booking places specifically for children who may be referred for some sort of family support but who are not necessarily going to need the support of a social worker. We do not expect it to be a significant number.

We are up against the clock but we will return to these issues. This is only the beginning of the engagement on this legislation, which will be coming before the House. There will be Second Stage, Committee Stage and so on, so there will be plenty of opportunities to discuss the issues further. The committee will return to one of the issues of most interest to the witnesses, which is conditions for the workforce in the sector. I thank the witnesses for their engagement and courtesy.

The joint committee went into private session at 12 p.m. and adjourned at 12.15 p.m. until 9 a.m. Wednesday, 22 February 2017.