I thank the committee for devoting the morning to this discussion on child care. It is a very important topic and a priority for me as Minister to address the range of issues which the committee has been considering this morning. Very soon after becoming Minister I stated that I wanted a focus on early years because it has been lacking in policy, funding and approach. Child care is a critical issue because of its impact on the child and its potential, as has been well illustrated by the contributions of Start Strong and the Donegal County Childcare Committee. Early intervention is good for a child's development. It is extremely supportive for parents who are full-time at home and those combining work with family life. It is also critical for the economy. How we tackle this will be a cutting-edge issue for the Irish economy. As the OECD stated, dealing with it properly would give us a competitive advantage. The participation of women and men in the workforce is critical to attracting and keeping industry and creating jobs. We must support parents working outside the home and those in the home who are perhaps involved in part-time work. It is a huge issue for society and we must give it the type of attention we are giving it this morning. It will be an ongoing issue.
What both presentations have in common is a demand for more resources, which is the bottom-line issue. All of the presentations call for more investment, and this is in the context of our borrowing €8 billion per month at present and still meeting economic and financial challenges. There is no question that as the economy improves we need to see more investment in child care. It is a question of pace, scale, what is feasible at present and how we put in place the building blocks to ensure we can meet the challenges outlined.
I thank Start Strong for its presentation on an approach to child care, which could be described as targeted universalism. It is the right approach and the Right from the Start report I commissioned on early years from a group chaired by Dr. Eilis Hennessy very much highlighted that this type of approach has been good for children and provides the services we need.
I also thank the Donegal County Childcare Committee for its initiative in this area and the recommendations it has made and costed. It suggests an incremental approach to making child care more accessible and has put forward a way in which this might be done. I was a member of the second commission on women and I remember recommending that we should have child care committees. It is worth reflecting on the developments we have seen over the years with regard to child care committees throughout the country and the range of work they have done. A total of €11 million is given by the Department to child care organisations to support this work and €9 million is given to child care committees to support the development of child care initiatives in their areas. It is important to support those who provide services and analyse the gaps and opportunities. Donegal receives €363,000 from the Department to do the work we have spoken about this morning and support the providers in the area. The child care committees provide an important support service throughout the country.
Particularly in recent months, we have tried to ensure the child care committees work as a national body and bring together their range of experience into a national framework and dialogue on the needs of the sector. In many ways the focus has been on the local area up to now, but we need to tap into the expertise of the child care committees and draw lessons from what they have to say. The report by the Donegal child care committee is useful in this regard because it has taken its experience and is suggesting how we ought to move forward. The different perspective it brings to the table provides food for thought. Its report will form part of the review of the schemes we are conducting at present and will inform the thinking.
I will give a broad overview of the approach to child care I am taking at present. I am very conscious of the importance of child care in supporting parents engaged in employment, education and training. This goes without saying. Many parents entrust their children, as we have heard, to the care of relatives, friends or neighbours. There has been a very concerted effort, including by the dedicated members of the child care committees, to get childminders to register, but it has been very unsuccessful. It is not quite clear why, but very low numbers of childminders, despite targeted work by all of the child care committees, have registered. Because of the informality of the childminding sector, initiatives to move it into a more formal regulated sector have not been successful. Informal arrangements have persisted to quite a degree despite very focused work over the years. Tax relief is available but this has not encouraged registration. It is a feature of the past ten years which merits further discussion, given that many parents will make the decision to use childminders.
Many other parents rely on early years services, 1,000 of which are community-based, while the remainder are commercially operated. Subvention is provided through the child care employment and training support, CETS, and community child care subvention, CCS, programmes to low-income working families and those engaged in education, training and community employment. It is also important to state that direct cash payments amount to €2.2 billion. These comprise child benefit and family income support, which is provided to 600,000 families, including 42,000 low-paid working families. This helps families with general costs and some families use it to contribute towards the cost of child care. It will never cover the full cost of child care for a family. We have focused on direct cash payments in this country and I want to take up a point made on child care costs. There is a perception that child care providers charge extraordinary amounts in comparison to other countries.
The reality is that this sector is low-paid and there is a very poor career structure. We must build on training and qualifications - and I have been focusing on that - to give more opportunities to people in the sector and to deliver a better service to children.
As I have repeatedly pointed out, in other European countries governments subsidise the cost rather than giving direct cash payments to parents, although sometimes they give cash payments as well. Over the years, however, Ireland has focused more on direct cash payments rather than on providing an affordable, accessible child care service. That is the legacy of the approach that was taken. Members will recall the early child care supplement, for example, where families were getting €1,200 extra per year towards child care costs. That was removed in 2008. Some of it was used for the early years free preschool year, which was a very good decision, but €300 million of the money that was a direct cash payment to parents went back into the Exchequer. We have a history of direct cash payment but we have not developed the sector to ensure it is affordable and accessible for the people for whom we wish it to be affordable. That is the current challenge, and it is a very big one given the resource implications. It is worth noting that the issue is not that the sector is charging so much relative to other countries, but that the model in Ireland has not been one of subsidising child care costs. Improving access to affordable, high-quality preschool and child care services is an objective I share. As Deputy Troy said, we all share it. The question is, what are the building blocks and how do we get the resources in place so they can be provided? We have done a certain amount on that but there is more to be done.
The issue of quality, which was referenced in both presentations, is absolutely central. There must be quality in the services. That is the reason I have been working on the eight-point preschool quality agenda for the last two years. Demanding qualifications and training and putting the supports for training and mentoring in place are critical for the child care service we have at present and for developing it.
A second challenge for the sector is economic sustainability. Over the last six years, the demand for child care declined dramatically as the take-up of child care places was affected by reductions in disposable income, unemployment and emigration. The number of women working in that period fell by 83,000. There has been an oversupply of child care places recently. There are places available, but the affordability of those places is the issue. How do we deal with that? I am conscious that changes to some schemes operated by the Department of Social Protection have placed further pressure on the community child care sector. That issue is often raised with me. The introduction of the ECCE programme and the continued investment in our child care schemes reduce the cost of child care for parents. This has helped to sustain the sector, including the jobs of more than 20,000 people. In recent years, we have faced a challenge in sustaining the sector. By maintaining the free preschool year and maintaining the investment at €250 million we have, thankfully, sustained the sector and allowed it to continue to do its valuable work at a time of huge economic challenge for the sector and the country.
The third challenge is funding. This year, my Department will spend €260 million on preschool child care programmes. It is a small portion of the amount we will spend on direct cash payments to families. I will briefly mention the supports that are available. Members of the committee are aware of the ECCE programme. That has cost us more this year because more children are availing of it. We have very good research now on the transition to primary school of the children who have attended and they have done very well in that transition. Again, the value of early intervention, which is the focus of Start Strong, is shown by the research from the Growing Up in Ireland study. It is costing more, and we have allocated an extra €15 million for the scheme this year to ensure it can be maintained. There is a very high take-up, at almost 96%. One-third of parents would not be able to afford that child care if that year was not available to them, so it is reaching parents who otherwise would not send their children to preschool.
We also have the community scheme, which consists of 950 community-based services throughout the country. It is not evenly spread, as a number of Deputies have said, so it is not available everywhere. A total of 25,000 children are availing of those subsidised child care places at present. Parents qualify for a very high rate of subsidy. They get €95 per week when they have a medical card or are on family income supplement and a lower rate of €50 per week if they have a GP visit card. That is a very substantial contribution to families who otherwise would not access child care. The question is whether this can be extended to reach more families.
There are 1,600 services providing supports to parents who are in education or training, and some 2,500 children are availing of child care places which are subsidised at a rate of €145 per week. If parents are attending certain education or training courses, they can get a contribution towards that. That scheme is open to both for-profit and not-for-profit services. There have been a number of points to the effect that the community scheme should be available to both private and public providers. That is a resource issue. If there were more resources and one did it at present, one would simply be spreading out the resource among more providers. Theoretically, it could go to private providers, but it is a resource issue.
We are introducing a new scheme this year. We have allocated €9.5 million to create an extra 1,800 subsidised places for community employment, CE, workers. It is operated on a similar basis to the child care education training support, CETS, scheme, but there are an extra 1,800 places for CE workers.
We will review the two schemes that are in place. We must carry out a review and an evaluation of the two schemes with a view to considering how best to structure future child care support. Both of them provide support for low-income working families and incentivise labour market activation, and they could be expanded to more families as resources permit. I will look at what Indecon says. Some of the recommendations are similar to the way we run the schemes at present, but it says we need more of what we are doing. I understand that.
One of the recommendations of the Indecon report is tax-based reliefs. Obviously, the Department of Finance would be responsible for any such measure. The Department has indicated that it is of the view that this would lead to increased prices and therefore would have limited impact in terms of savings for parents. That is a real issue. Senator van Turnhout raised questions about whether tax-based reliefs was the right approach to take. In addition, it would benefit only individuals who are in the tax net. There is already a single person carer tax credit available to certain people and it can be transferred to another person, a secondary claimant, other than the principal carer.
The issue of tax relief would have to be considered carefully. There is evidence - Start Strong referred to this - that those countries that have the strongest support for child care, the often-mentioned Nordic countries and others, generally do it through payments for services rather than direct payment or credits to parents. They generally do it as a universal service but depending on income, even in Norway, there is a sliding scale of payment that parents make to the service. The international model that people believe yields the best return is one in which money is put into a more universal service rather than doing it through the tax system.
The discussion today has been largely about parents and costs. However, as has been pointed out, it is important to bear in mind that the primary focus is the child and the quality of what is available to children.
We have unequivocal evidence from Irish research - not English or American research - and strong data on the impact intervention has on children during their early years, from educational and developmental points of view, and on how it will provide savings for the country if we invest in the early years.
Those were my immediate thoughts on hearing the two presentations and I hope they will prove helpful to the committee.