Childcare: Impact of Covid-19 (Resumed).

We are joined by representatives from the Department of Children and Youth Affairs to discuss childcare. I welcome, in committee room 1, Dr. Fergal Lynch, Secretary General, Ms Bernie McNally, assistant secretary, Dr. Anne-Marie Brooks, principal officer, Mr. Toby Wolfe, principal officer, and Mr. Mark Considine, principal officer.

I wish to advise our guests 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 this committee. If witnesses 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 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 manner as to make him, her or it identifiable. We expect witnesses to answer questions asked by the committee clearly and with candour. However, witnesses can and should expect to be treated fairly and with respect and consideration at all times in accordance with the witness protocol.

I invite Dr. Lynch to give his opening remarks.

Dr. Fergal Lynch

I thank members for the invitation to attend this afternoon's meeting of the Special Committee on Covid-19 Response. I am joined by Ms Bernie McNally, Dr. Anne-Marie Brooks, Mr. Toby Wolfe and Mr. Mark Considine.

The closure of all centre based early learning services and most childminders from 12 March was necessary due to Covid-19, but it has had adverse effects on children as well as bringing major challenges for the sustainability of the sector. In dealing with this issue, the Department's primary concern has been to meet the needs of children and families and to do what is best for them. We also want to do all we possibly can to help sustain the early learning and care and school age childcare sector. We are conscious that, unlike schools, the State does not either own or almost fully fund this sector. In fact, public funding accounts for approximately 58% of childcare providers' income in what is essentially a private sector system. Parents account for the remaining 42% of income in a sector that has approximately 75% for-profit and 25% non-profit or community services.

We recognise that the sector operates in a very challenging environment with low pay and a high turnover of staff. The Department’s work to support the sector is focused on promoting high quality, affordable and accessible childcare.

When services closed in March we moved, as a first measure, to guarantee State funding through the existing early childhood care and education scheme and the national childcare scheme, which incorporates the older legacy schemes. These operated from 13 March until early April, by which time we introduced a temporary wage subsidy childcare scheme, operating to 28 June in conjunction with the corresponding Revenue scheme. This system has protected parents by guaranteeing no parental fees for participating providers for the duration of the scheme. It has also protected childcare workers by ensuring that up to 85% of them could retain their pre-Covid-19 income and maintain a relationship with their employer. This helped prevent losing them to unemployment and possibly not returning to their jobs. Our focus was on helping providers to maintain viability to the greatest possible extent. The result was that the temporary wage subsidy childcare scheme supported just over 3,900 providers, which represents some 87% of the sector, and some 22,670 staff at an estimated cost of €77.3 million to the Department.

The Department has worked intensively with the sector on a plan for the phased reopening of childcare services from 29 June. We are grateful to the sector, including the members of an advisory group that has met once or twice every week since the middle of May, for the advices and collaborative perspectives they have offered. Again, our first concern was for the safety and welfare of children and staff. Critical to this was the public health guidance we received. We worked in collaboration with the Department of Health, the HSE and the Health Protection Surveillance Centre to ensure the sector was provided with expert guidance on how services could be managed when reopening and what arrangements and procedures were needed to minimise the risk from Covid-19 to children, families and staff.

Estimating likely demand for childcare services between 29 June and early September is a significant challenge. The planned reopening on 29 June occurs at a time of year when just 40% of services would normally be open. That is 1,800 out of approximately 4,500 providers. We are conscious that demand may be lower to start but may rise as parents seek to return to their own work and to more normal living and feel greater confidence regarding the safety of their children. However, compared to pre-Covid, demand this autumn may be lower because of job losses among parents or because of more flexible working that allows families to better balance caring and working responsibilities. Overall, we anticipate that demand for places will rise progressively over the summer and autumn but we are in uncharted waters this year and we cannot be definitive about uptake.

In turn, this brings challenges with regard to the type of funding model that stands the best chance of successfully supporting the sector in the weeks and months ahead. The Department developed, and the Government approved, a significant funding package for the period from 29 June to 23 August. At €75 million, it is more than two and a half times what we would have projected to spend in a normal year for this eight-week period. The Department’s written submission to the committee sets out the details of the funding package, comprising the Revenue temporary wage subsidy scheme, resumption of the Department’s existing funding schemes and two further supports: a reopening grant to the value of €18 million and a capital grant totalling €14.2 million, with a further fund of €375,000 for certain childminders.

We have sought to offer clear advice about the practicalities of reopening. We have developed a suite of guidance documents for providers, practitioners and parents and we are updating the website regularly as further guidance is developed. We have sector-specific advice on preparing to reopen, a health and safety checklist, and frequently asked questions for providers and practitioners as well as separate frequently asked question documents on reopening and on funding.

The Department is strongly committed to doing all we can to support early learning and care and school-aged childcare services in reopening. We believe it is vital that services can do so to the benefit of children and their families. Not all our efforts have been successful. The scheme of childcare for essential healthcare workers had to be cancelled because it was not possible to meet all of the requirements that would have made it attractive to providers. This underlines the difficulty of putting in place at short notice often complex measures that meet public health requirements and the concerns and needs of providers and parents. However, we have continued to work hard with the sector to do everything possible to make the reopening on 29 June a feasible proposition, again within the boundaries of where we must operate for the safety of children and staff.

We have worked closely with the Department of Education and Skills to support the transitions for children returning to services. The joint initiative, Let's Get Ready, which was launched on 15 June, seeks to help parents and children with the transitions for children returning to, or going to, preschool for the first time and for children moving from preschool to primary school.

More recently, our focus has been on getting ready for the first phase of reopening on 29 June. While it is difficult just yet to predict the situation that will apply after this initial eight-week period, we have commenced planning for the 2020-21 programme year, which we propose to start on 24 August. The Department will review demand and supply over the next few weeks and we will consult stakeholders before finalising the programme from August. We will seek to finalise these arrangements as quickly as possible, having analysed the outcome of the initial reopening phase in the coming weeks.

Finally, the committee may wish to note, regarding the wider development and improvement of early years services, that the European Commission, in its recent semester report on Ireland for 2019, has noted substantial progress in increasing access to affordable and quality childcare. There is much more to be done, and I am referring to this simply as an indication of the road travelled to date and the progress made from a low base in recent years. In the time available, I have highlighted some of the key points of importance to this issue. A much fuller and more detailed treatment of these matters is contained in the Department's written submission to the committee.

I thank Dr. Lynch. Members will have between five and ten minutes, depending on the member. I will need to keep people to those times because everybody has indicated that they want to contribute. The first speaker is Teachta Funchion. She has ten minutes.

I thank the departmental officials for being with us. I have a number of points I want to get through, the first of which is to do with consultation. We heard earlier from representatives of the unions for front-line healthcare workers that there were zero consultations with their own Department regarding what we now know was a failed childcare scheme proposal. I welcome the advisory committee that was set up in the past few weeks but it really should have been put in place at the very start of all this, not in the middle of May. The group has worked well and I want to know whether the Department is committed to keeping it in place and inviting relevant groups to participate as the process develops. For example, the union representatives should be brought in to discuss any childcare scheme for front-line workers. If the advisory group had been in place from the start, maybe we would have got a scheme that actually worked. Since it has been up and running, consultation has been a lot clearer and better, from what I can see, and it is key to many different issues. Can we get a commitment from the Department - I hope there will be a Department in the future to fulfil any such commitment - that the advisory group will stay?

Dr. Fergal Lynch

I certainly can give a commitment that we will retain the advisory group, which we have found very helpful. The group has met once or twice a week since the middle of May and we have worked very collaboratively with it to produce very positive results. To deal with the Deputy's point regarding what was discussed this morning, ideally we would have had much earlier-stage consultations, including with the unions. At the time, for practical reasons, that simply did not prove possible because of the nature of what we were dealing with in a very compressed time period. We were essentially operating off a very limited number of options. The public health requirements in particular effectively would have limited us to one of two options, namely, either childcare workers providing a service at home or else a limited opening of services. It became clear very early on in our discussions with NPHET, which was very helpful, that the only game in town was childcare workers going into the homes of healthcare workers. We were very limited in our options and what we could discuss with others.

It is fair to say that we have a good record of consulting, generally speaking, throughout the Department on all sorts of issues. It was unfortunate that we did not have an opportunity to do that in the early stages of the development of this particular scheme but I certainly can give a commitment that we will continue to consult widely, going forward, in regard to the schemes. With particular reference to the advisory group, it has been a good group which has met, as I said, once or twice a week since the middle of May. We have worked collaboratively with the group to make sure that we produce the best possible scheme.

Sustainability is a key issue in all of this. I have been talking about it since the very start of the crisis. We know that the childcare sector has been underfunded for years and this was the straw that broke the camel's back for most providers and staff working within it. I have been asking about a sustainability fund for the childcare sector and the one that exists for community services. I have not got a clear answer as to whether that fund will be used to help childcare facilities that now have debt due to the Covid closures and may not be able to reopen. I would like a reassurance from the Secretary General that there will be a sustainability fund to assist them. Otherwise, there will be closures and job losses.

I also want to ask about the wage subsidy scheme. Can a commitment be given to continue the payments under that scheme at the full rate, not the 85% rate?

As Dr. Lynch said in his opening statement, the very reason it was set up was to keep people in the sector, and we will see them leaving the sector. The Department will put providers in a very difficult situation. If they had a staff of 20 and they can only bring back ten, for social distancing reasons, how do they pick which staff to bring back? The Department is creating a very difficult situation. My next questions are about the sustainability fund and the wage subsidy scheme.

Dr. Fergal Lynch

On the wage subsidy scheme, as the Deputy knows, the scheme that we announced for the next eight weeks from 29 June will feature the temporary wage subsidy scheme. There is then a decision to be made by the Government as to the future of the temporary wage subsidy scheme overall. I cannot speculate on what that will be, but it will be a decision for the Government. That will obviously influence the type of scheme that we can then operate from 24 August onwards but, as I say, it will be a decision for the Government.

I take the point about sustainability. I would emphasise that the scheme we have put in place for the next eight weeks includes a capital scheme of €14.2 million and a reopening grant totalling €18 million. I think there is a significant component there. We also do programme support payments and, as Deputy Funchion mentioned, there is the sustainability fund as well. Up to now that has operated essentially on the community side. If I may, I will ask Ms McNally to deal with further aspects of the sustainability element.

Ms Bernie McNally

Specifically on the sustainability fund and the questions Deputy Funchion asked about opening it up to the private sector, there are some potential state aid issues there, so we are looking into those at the moment. Hopefully, that will not prove to be an issue. We certainly would like to extend the fund if we could and we have heard the feedback on that.

As regards sustainability generally, much of the 141% investment in the sector in the past five years has gone to parents but some of it has gone to the sector because sustainability is a core objective of the Department.

Specifically in regard to capacity restraints because of social distancing, the public health guidance is such that some services will be able to open with almost normal capacity because the public health advice has been that we can retain the ratios if the space that is provided is appropriate. Some services will be able to bring back a very high percentage of parents and we hope that too will assist with sustainability, in addition to the funding packages that we provided initially for the first couple of months, the one for July and August, and the one we hope to provide from the end of August onwards.

What guidelines have been issued to the sector? Many people working in the sector have come to us with concerns about their own health and safety. We are all talking about whether schools will open in September and if they will open perhaps for one or two days a week, yet the early childcare sector is expected to open from Monday with no talk about it only being for one or two days a week. Are clear guidelines being provided? We are getting a range of questions about Covid symptoms and how managers are to handle such situations. Have guidelines been issued?

I also wish to ask about the early childhood care and education, ECCE, programme. Given that children had to drop out of that in mid-March, has any consideration been given to rolling out even a few additional weeks for children due to start school in August, as that would help them by acting as a stepping stone to September? I have one or two more questions to ask.

Ms Bernie McNally

On the guidelines, we have published a very significant amount of resources. In fact, some people in the sector say we have probably given a little bit too much. There is a dedicated space on our First 5 website, with all sorts of guidance, including specifically what Deputy Funchion asks about. Significant guidance has been developed by the Health Protection Surveillance Centre, HPSC, of the HSE for people who have concerns about their health or infection control. We have worked with the HPSC and published the guidelines alongside other resources that organisations such as Early Childhood Ireland and others have helped us with.

As regards the ECCE programme, I fully hear what the Deputy says about how it would be lovely for children to give them an extra few weeks. Our focus had to be on getting childcare services up and running on 29 June and I think the Deputy will appreciate that it has been a significant challenge. I think we are nearly there. The reports on the ground seem to be quite positive about next week, so we can turn our attention to others. There would be a cost to that. We do not have a budget for that at the moment but it is something we can look at.

My last question relates not necessarily to Covid but to the sponsorship scheme where children can get additional childcare under the national childcare scheme, NCS. There seems to be some confusion in some areas. A facility in the west could not actually access this scheme and had to pay for the additional childcare itself. Is there a programme in place or will additional training or information be rolled out to the five sponsorship bodies?

Ms Bernie McNally

We would be delighted to follow up on any individual cases.

The NCS was unfortunate in that it had just launched in November and then Covid closed down services in March. The NCS was really just getting up and running. There are only approximately 200 children registered under the sponsor agreement. It was building but needed a little bit more time.

We would love to look at the details of that case. We had been running some training and information for Tusla and the HSE, as well as the various agencies that were helping us. It was our intention to do more, so we can follow up on that.

I thank the witnesses for coming in and for all of the work done to begin next week.

There is some uncertainty about the public health advice we have now which may be different from what happens in September. For example, a childcare provider local to me is a small place within two rooms. Many parents using the facility have been early childhood care and education, ECCE, only. Due to the new arrangements requiring the pod system and the same children with the same childcare worker, the model is essentially disrupted because they do not have this physical space to be able to keep people separate enough. For example, in order to leave, one has to go through another room. That is just a one practical example.

Business decisions will be needed to be made by certain providers. If advice in September or October proves to be substantially different and providers have made a decision that they cannot or will not be able to sustain services based on the current model, this will have an impact on the different parents. How is the Department thinking about that small cohort which are in real difficulties about reopening on Monday but may in fact be okay if the model were to change? What is the Department's forecasting on that?

Mr. Toby Wolfe

The public health advice allows, in most cases, providers to operate at something really rather close to the adult-child ratios and capacity which they were working with before. While there will have to be some adjustments at drop off, arrival, entries, exits, use of relief staff and so on, it will not be such a big change from the way their practices worked previously.

We cannot make any promises at this stage as to whether the public health advice will change in September. Clearly much of that depends on the course and control of the virus over the coming weeks. The Health Protection Surveillance Centre, HPSC, has made clear the public health advice is a living document. It is what we have at the moment. It is intended to last until there is a change in circumstances.

Some services will find it more challenging than others, just depending on the layout of the rooms, for example. That is where our reopening grant is intended to provide some supports for services which have to make bigger changes.

Speaking with providers earlier, they were not clear about for what the reopening grant would be allowed to be used.

Mr. Toby Wolfe

My colleagues might say more on that. There is quite a lot of guidance available already on that.

Ms Bernie McNally

We have published advice on what the grant can be used for. For example, it can be used for consumables such as sanitiser, soap, paper towels, etc. It can be used for extra cleaning. If a service only needed two hours of cleaning before and now it needs six hours, it can be used for that. It can be used to bring in extra staff for extra reception duties. There is quite a lot published on that already.

If I could go back to my example because it is a reasonably foreseeable problem. Due to their physical layout, some facilities may face greater challenges than others. This has a significant impact on the tens and tens of families who may have to scramble to find somewhere else or who may have to pay more in order to take a full day instead of a half day.

It has a very significant impact on every single childcare provider in structural difficulties who, for whatever reason, just cannot fit into the arrangements for next week. For example, the reopening grant could be used to survive until August or September when, based on the trajectory of the virus and how circumstances can change, it is not impossible that circumstances could change substantially with regard to public health advice. On the basis that I can reasonably foresee this, what is the Department thinking and forecasting to work to try to keep those providers who may decide to close, with an impact on parents, and who might otherwise have been viable if they had reopening grants and other grants that could see them through this period into the next academic year and some real clarity at that point?

Ms Bernie McNally

The range of measures we have put in place will ensure that a majority of the services that opened last July and August will be open again this July and August. We do not know and must wait to see next week, but the early indications we have received from various stakeholders we are engaging with and surveys we have done with providers are that the vast majority of services that were due to open next week will open. By the end of August and the beginning of September, the majority of the remainder will reopen. The feedback we are getting is that the package we have put together is broadly meeting needs-----

I thank Ms McNally for that. I am providing additional feedback, which is that this is also an issue and the Department might keep it in mind. I would appreciate that.

Ms Bernie McNally

We will.

The committee heard earlier from the INMO and Crann Support Group. We had written submissions from other groups, including Seas Suas. During most of the commentary on the provision of healthcare for front-line workers, there has been criticism of the consultation process and how people were excluded to a degree, or at least not involved. What have the officials to say regarding this criticism, which comes directly from those who are responsible for healthcare workers and those who provide the necessary childcare?

Dr. Fergal Lynch

We accept that ideally the Department would have engaged in that consultation at an earlier stage. We have to look back to the middle of March this year when things were extremely fraught and difficult in trying to organise things in a very short period. We certainly did not have a huge number of options at the time. When we worked our way through what was possible, we were asked to come up a scheme very quickly in the first instance. In the event, it was not put in place for some time thereafter. At the beginning, we were very pressed for time. We also had practical issues around the number of options we would be able to consult on. It really came down to the question of being able to put individual childcare workers into the healthcare workers' homes. I accept that ideally we would have been in a situation where we would have consulted. I do not believe it is typical of our reputation or our practice. The Department has a strong reputation for consulting widely on a whole range of issues. As referenced earlier, we now have a good system of consultation using the advisory group that meets once or twice a week. We also have a reference group that also operates effectively. I absolutely accept that it would have been far more ideal for us to have been able to consult on that scheme, but they were extremely difficult days in March and April

Does Dr. Lynch accept what the INMO said this morning in its opening statement that the Department's response to this has been poor and that it has let down the nursing and midwifery profession? The committee was told that the information provided in response to requests under freedom of information was less than adequate. Why was that the case?

Dr. Fergal Lynch

I think that we provided everything we possibly could under FOI. We certainly meant absolutely no disrespect whatsoever to the nurses or the nursing unions. We were operating in an extremely constricted environment at the time and we did what we possibly could at that time. Since then we have been able to work very effectively with the sector to move forward.

Has the Department examined the survey carried out by Crann Support Group? This afternoon, Ms Marie Daly, its CEO, provided the committee with details of the survey which highlights several areas which the sector requires to be addressed. Has the Department examined that survey? What is its response to it?

Ms Bernie McNally

We have looked at the survey. It is fair to say that we have carried out our own surveys, as have several other organisations. All those surveys have helped to design and feed into everything we have done in recent weeks, including the funding model for July and August. Indeed, they will feed into the model to be put in place from the end of August onwards. Much of the information in the Crann Support Group survey reinforced issues of which we were already aware, such as struggles around workforce issues, pay and conditions, security of position and sustainability. It reinforced much of what we knew or suspected and it is actively feeding into our process. Crann is part of the advisory group and, as such, we meet Ms Daly weekly.

I raise this issue because what Dr. Lynch indicated in his opening statement almost contradicts the statements given to the committee earlier this afternoon by the representative organisations in the context of the co-operation between the groups and the Department. For example, the Crann survey states that 98% of respondents indicated they will have some level of financial difficulty in reopening. Seas Suas criticised and found fault with the amount of money that has been allocated and stated that €130 million will be required for the six months to the end of the year.

Another issue that came up with regard to consultation was the notion of pods. The sector indicated that the first it heard of pods was when it was mentioned in the Dáil and that there was no consultation on the issue. It has serious reservations about the cost of reopening and the staffing issues that will arise in meeting the required regulations. The representative organisations addressed the committee on access to Covid-19 testing, cross-contamination and the implications of operating on reduced ratios. It seems that they have one view, which will require significant funding now to address, while the Department has another view, but we are talking about the same sector.

Ms Bernie McNally

We are working with Seas Suas. All the sectoral organisations had concerns that there would not be sufficient funding from parents or the State to make them viable. To give an example of how we have addressed that concern, the Department normally spends €28 million on the childcare sector in July and August. This year, the package that is available is €75 million, as Deputies have heard previously. There is significant extra money going into the sector in the knowledge that some parents will not return and, as such, the sector is losing parental fees. That package of measures is expected to be sufficient. To begin to make a profit, providers will need to get either 40% of parents back or maybe 20% and charge some kind of retention deposit for July and August. In general, if they get some form of income from approximately 40% of parents, the package we have put in place will allow them to start making a reasonable profit.

Seas Suas and other organisations at the coalface of the delivery of this service are saying that the funding is insufficient. It is misleading to compare the allocation this year to that in previous years because the funding in place previously was insufficient and providers must now deal with the substantially greater issues raised by Covid-19 and the regulations. The representative bodies referred to the excess red tape and bureaucracy around this which they wish to be lessened. The Department is not comparing like with like in the context of funding this year and previous years. Providers need substantial financial support if they are to reopen and remain open.

Ms Bernie McNally

What we have done is take a very evidence-based approach. We have used information that we have on the providers' costs and that is how we came up with a figure of €75 million this year, instead of €28 million. For example, the reopening grant will cover a lot of their additional costs from the list that I spoke about earlier.

If only 50% of the parents return some providers will have surplus staff to help them out. It is not that they will have additional costs and need more staff, with additional costs. They will have some surplus staff that are being funded, through the temporary wage subsidy scheme, by up to 85% of their income plus what they will get from us through schemes, plus what they will get from parents, plus the capital money, and plus the reopening money that should allow them to keep their heads above water and start to make a profit after they have income from about 40% of services. We will continue to monitor this aspect. We have worked very closely with the stakeholders to develop the funding package with them.

The sector is under serious financial pressure. What has been offered by the Department in the face of Covid-19, and planning for a second wave of the virus, is not sufficient and does not show real forward planning or thinking on the side of the Department, or a real understanding of the sector and the cost base that it must carry. As an aside, we have been told that there is only one underwriter. Providers have serious insurance problems but that existed before Covid-19 and exists now in an even more significant way.

Finally, in addressing that matter, was the Department asked about its future in the context of what is being talked about now relative to the formation of Government? Is it a fact that this discussion was shared with the Department or was it not? I would like to hear the views of the witnesses on this matter.

Dr. Fergal Lynch

On the future of the Department, we regard that as entirely a matter for Government. The next Government will decide on the formation of different Departments and functions assigned to them. We have had no hand, act or part or involvement in any of that debate. That is a matter for others.

Will it be a disappointing development?

The Deputy has been told that it will be a matter for him in the next Government.

Dr. Fergal Lynch

Deputies, it is not appropriate for me to comment.

Or maybe the Acting Chairman, one would not know.

Let us not be presumptuous. The next speaker is Deputy Costello and he has five minutes.

One of the questions that I have asked the Minister before, and I asked the ECI earlier, concerned the 15% of providers who did not sign up for the temporary wage scheme. When I last asked my question the witnesses said they would look into it and try to dig down into it. Do they have an insight into why the 15% of providers did not sign up? I keep asking because it is important for us to understand where the providers are coming from in terms of set up so that the information can feed into any financial decisions or models in the future. The matter is concerning. What are the plans for the 15%? Do they plan to close? Any loss of providers would put huge pressure on the system and on parents. If 15% of providers were to close then that would be catastrophic so any information on that would be really useful.

The points about consultation have been raised quite a bit so I shall leave them. It is good to see that a committee is in place now. There has been a lot of talk about parents leaving the system but staff leaving the system is another concern. There is a high proportion of staff from outside of the country who may have gone home at this time and may not come back. There may also be staff seeking other employment. Do we have any indication of staff leaving the sector? Has the issue come up through the committee? What is being done about that?

Dr. Fergal Lynch

In terms of the 15% of providers, we are still doing more work on that to understand the issue. We have not identified any serious or specific individual trend that explains why that is the case.

It is important to emphasise they are entitled to the various supports we have announced, including the capital grant and the reopening grant. We are doing more work on that. We have not identified a specific reason for it.

With regard to concerns that a high proportion of providers would close, the good news so far, and I stress this is preliminary information, is that our latest data from Tusla is that 18 services have notified their intention to close but 17 new services have notified their intention to open. It is pretty much line ball on that. We do not have an immediate indication that a significant number of services will close permanently and will not be replaced.

With regard to staff leaving the system and plans for the future, this is a continuing issue for us. There is an unfortunately high staff turnover ratio that we have been dealing with for some time. One of the big things we are planning is a workforce planning study, which had started before Covid-19. We were about to launch into a consultation phase just before the pandemic hit. We hope to work our way through that and rejuvenate it as quickly as possible.

Teachta Sherlock has five minutes.

I will gladly take the balance of the Green Party member's time, if I could.

I am happy to share.

Deputy Costello is very kind. I thank the witnesses for appearing before us. I want to go back to the staff ratios. There are two stories here; there is the 29 June scenario and the September onwards scenario. What is the Department's assessment of the level of demand in percentage terms for 29 June onwards with regard to staff? Will 50% or 40% be back? I ask the witnesses to give us a picture on that.

Ms Bernie McNally

Is Deputy Sherlock speaking about parental demand? What do we think the demand from parents will be?

Staff and parental. I want to get a clearer picture of what the sector will look like.

Ms Bernie McNally

We asked Ipsos MRBI to do a poll for us a number of weeks ago asking parents whether they would return. That survey, which was a few weeks ago and things have moved on since then, showed that approximately half of parents who used centre-based care last summer would use it again this summer and half of them would wait until a little bit later, probably September.

If that is 50%, and if we are looking at the new pod type arrangements, because we had a considerable discussion on this in the Dáil some time back, the question arises as to how staffing will be applied to the new pod arrangements in September. I presume it will go back up to 100%. Can the new pod system be made work, particularly for smaller and older providers that have been providing services in the community for a decade or two or even longer, if a serious constraint is put on them if the pod system is to be adhered to, notwithstanding the fact that reopening grants and once-off capital grants are being made available? I note what was said about providers feeding back that they would be able to manage it, but even if €18 million is put in place for additional staffing costs, training and staff guidelines, additional resources, hygiene and cleaning consumables, if the regulatory regime on the spatial requirements is applied uniformly throughout the system it will have a major impact on providers throughout the State, such that there will be an even higher rate of attrition in the number of providers. What I am getting at is if we could get some assurance from the Department and Tusla that the hammer will not fall too hard and common sense will be applied, such that people will be allowed to survive as long as they meet, by and large, the requirements expected of them.

Ms Bernie McNally

Absolutely. We have been working very closely with Tusla. Tusla understands this is a pandemic. Services will take a while to get used to the new regime.

The HSE surveillance centre people told us that because we were already operating with low ratios, such as 1:3, 1:5 and 1:6, with the highest coming to 1:12, and already had a strict space regime, we did not need to go further. Schools might have to go further but we did not have to do so because of our lower ratios. In working with the sector, we expect that a lot of childcare providers will have to change behaviours but they still may be able to retain 100% of their children and we know of a number of services that are expecting to take back 100% and lots will take back in the region of 90%. Tusla and ourselves are working reasonably and pragmatically with the sector on that.

I appreciate that. We had a good engagement with the INMO and SIPTU earlier regarding healthcare workers. The evidence is there about the level of engagement with the INMO, in particular, in respect of 18 May, which was the date on which childcare was supposed to be provided for front-line workers. I contend that there was a failure on the part of the State to live up to its promise to deliver for those workers. It is incumbent on us to acknowledge that there was a failure in respect of those people. Do the witnesses acknowledge that the Department of Children and Youth Affairs and all Departments failed those front-line workers? There is a major issue whereby it considerably added to the stress and strain placed on those workers in trying to do their jobs. These people had a legitimate expectation, which was preannounced in the context of the Roadmap for Reopening Society and Business, that they would have access to those childcare facilities but this never happened. Should we not now acknowledge that there was a failure on the part of the State towards those people? Do they not deserve an apology for that or some acknowledgement of the failure to which I refer?

Dr. Fergal Lynch

We were very disappointed when the scheme did not work out. We put a huge amount of time into it. The people sitting with me in this room spent weekends, nights and long hours trying to put together a scheme that would work. This did not happen. However, that was not because of a want of trying. It proved not to be possible in the end for a number of reasons which were rehearsed this morning, including matters such as insurance issues and concerns about Covid-related claims, as well as specific issues relating to lunch and rest breaks, unfamiliar working environments and so on.

I apologise for cutting across Dr. Lynch. Why was that not signalled at an earlier stage to the organisations that represent those workers? It would have been much easier for people to digest if there were legitimate issues such as those relating to insurance.

Dr. Fergal Lynch

We were working our way through the issues and we were hoping we would come to solutions to them. In the end, unfortunately this was not possible. We were extremely disappointed because we were very committed to trying to achieve a package that would work. We had the funding in place, which had been agreed by the Government. There was a €4.2 million per week package of funding. That would have involved an average pay of €15 per hour for childcare workers, employer costs for PRSI and holiday pay and some funding for administration costs for providers as well. I am not blaming anybody but it was disappointing. It did not happen. That was not, however, for the want of trying.

I thank our guests from the Department for attending. I acknowledge that it has been a difficult period and that a great deal of work has been done by the Department in challenging circumstances. I want to come back to some of the previous points that were made. Seeking to develop a policy to provide a specific childcare service for front-line workers and not including the representative bodies of those workers in the discussions was a huge flaw. It beggars belief that we essentially got to 14 May with a scheme that was bound to fail. Dr. Lynch mentioned that the provision of childcare in the homes of front-line workers was the only option available. However, the INMO gave us documentation this morning - and I am not sure if Dr. Lynch and his colleagues have received it - which provides a breakdown of the front-line workers and the types of childcare provision of which they currently avail.

It shows that 30% of them use childminders in the childminder's home. Perhaps the Department did examine this, but it seems to me there was a possibility of continuing arrangements for children of front-line workers who had existing arrangements with childcare minders. Did the Department look into this possibility? If so, what were the barriers to utilising it?

Dr. Fergal Lynch

Yes, we did look at that and a range of other issues. I will ask Ms McNally to comment on that in a minute but I will first say that in proposing what we proposed, we were conscious that a smaller informal scheme which was being organised online successfully matched approximately 1,400 people who were willing to provide childcare to essential workers. Obviously, they faced the same sorts of issues we were conscious of, including the insurance issue and concerns about rest breaks, unfamiliar working environments and so on. We looked at a range of issues. At the time, however, especially in the early days, when there were such concerns about doing anything that would relax the public health restrictions, the key issue we were brought back to the whole time was, obviously and understandably, one of public health. I am not in any way criticising NPHET for the conclusions it reached at the time but one of those conclusions, from our having looked at these issues, was that this was the only possibility that could be developed at that time.

I have only a couple of minutes and I have another question. Two things have become really clear over the course of Covid, the first being that in the absence of childcare, women are left holding the baby. The second, which has become blatantly clear, is that women can no longer be left holding the baby while also trying to hold down a job. We will have to address this. We have to get the childcare requirements of families right. I think there is a real risk at this point that if we do not get childcare right for families, we will have a two-tiered workforce system when we return to work and women will be left behind. It will be women who will be required to stay at home or, perhaps, take jobs that offer more flexibility but lower wages. I think there is a real risk that women's participation in the workforce will be very negatively impacted if we do not provide proper childcare facilities. Has the Department conducted a gender analysis of the lack of childcare and its impact on specific sectors? We see that the caring sector, including nursing, is heavily gendered. Has the Department provided a gender analysis in this regard? If not, is it willing to do one? My second question in that regard is this: Has the Department had any discussions with the Department of Business, Enterprise and Innovation about the impacts of lack of childcare on female employees and employers in the sector and in the business area? Is the Department looking at pre-emptive solutions to mitigate any potential problems coming down the road?

Ms Bernie McNally

I will answer those questions. Regarding female labour market participation, we have done a huge amount of work on a cross-government basis under First 5, the whole-of-government strategy for babies, young children and families. That focused hugely on supporting women who choose to work outside the home to do so. Not only did it look at childcare, but we also worked with the Department of Justice and Equality and the Department of Employment Affairs and Social Protection on paternity leave, paid parental leave and encouraging both partners, if there are two partners, to share that leave in order that it might be the woman who goes back to work and her partner who stays at home. A lot is contained in First 5, which is a ten-year strategy up to 2028. We work with the Departments of Business, Enterprise and Innovation, Public Expenditure and Reform, and Finance regularly as well on jobs and the economy, and we know that childcare is very much central to that. First 5 commits to doubling the level of investment in childcare over the coming years to make it more accessible, more affordable, higher-quality and more flexible. There was a draft childminding action plan that would reform childminding because we know that childminding is probably more flexible in some ways and responsive for parents who work shifts, such as front-line workers. There is a lot of work in progress - a lot more to be done but a lot started - and the national childcare scheme that was developed just last November is also a potential solution.

I want to talk about the Oireachtas Library and Research Service report on public provision of early childhood education. It is only a three-page report but I think it is a dynamite report. The report finds that the key challenges to universal provision in Ireland - in other words, provision for all - are the negative economic impact of the Covid-19 outbreak and what it describes as the market-driven approach to early childhood education and care in this country. It states that early childhood care and education in this country is characterised by low state investment, low wages and high fees. It states that 99% of pre-primary services, that is for children aged three to five years, is in the private sector, whereas the OECD average is 34%. It finds that the average wage for workers in the sector is €11.44 per hour, whereas the living wage is nearly a euro higher than that at €12.30. It finds that early childcare and education fees for under-threes are the highest in Europe alongside the Netherlands, the UK and Switzerland. Earlier today the situation was summed up by the Desmond Chair of Early Childhood Education in Dublin City University, Professor Mathias Urban, who said the system here is fragmented, very expensive and does not produce good results for children, families or the state.

The report quotes from a survey done last year by Yerkes and Javornik which found high levels of access, availability, affordability and quality in countries which had public childcare systems, instancing Iceland, Slovenia and Sweden, and the opposite in those which had lower levels of state investment, instancing the Netherlands, Australia and the UK. The report finds that in Germany when there was a switch to full public provision of childcare there was a decline in child abuse and neglect; an increase in child birth rates; an improvement in the social and emotional development of children; and, an improvement in maternal life satisfaction. To repeat, it states that the obstacles to universal childcare provision are the economic consequences of Covid and the market-driven system.

There are no costings included. Some will ask if the country can afford to move towards universal public provision. I think in the light of this data and this report the question is framed the wrong way. The question is, can we afford not to do that? Low-paid childcare workers and hard-pressed parents would say that we cannot afford not to move towards this. I would favour a system which is free and which is funded through steeply progressive taxation with particular concentration on the big corporations and the very highest income earners.

My question relates to financing. Are there plans in place, and if there are can the witnesses describe what they are, to do some costings on the type of provision that is mentioned in this dynamite report?

Dr. Fergal Lynch

I thank the Deputy. What he has described summarises very well many of the issues that we have been very conscious of for a considerable period of time and a lot of it would be generally accepted, including the issues of low State investment, high fees, low pay and so on. There is no argument about those. Obviously, I am not going to get into policy debate about what Government should do. I will say that there is an expert group which is developing a funding model at the moment and that started around this time last year, I think. That expert group has been working to help us develop proposals for the future in that regard. The funding model that it could propose could, for example, operate in parallel to the existing schemes or it could propose something else but the key issue emerging from all of this work is the scale and complexity of it and the time it would take to develop a new funding model.

Among other issues it would deal with would be things like fee controls, the question of reasonable profits and how best to develop a system for the future. I stress that it is a matter for Government to decide whether it wants to move to a particular different model, be it a public one or a mixed public and private one. We are certainly doing extensive work through the expert group, which includes experts from other countries and people within the system here to develop proposals for the future in that regard.

Obviously, the cost will be a major issue. The Deputy rightly identified that by comparison with other countries, Irish spending is low, although it has increased very significantly in recent years. State funding of childcare has increased by about 141% in the past five years, but admittedly from a very low base. We are starting from a low base and we have a significant expert group working on that funding model.

I thank the departmental officials for attending today. I wish to cover the costs to business, in particular that of insurance which was discussed already. Earlier the witnesses from Crann advised that the average insurance cost per facility was between €6,000 and €9,000 per annum with only one or two injury claims in a year - I do not know the extent of the claims. Those witnesses also highlighted that the insurance environment is now stunting childcare activity yet the premiums continue to rise. Has the Department considered any type of mutual insurance fund or bond and if not why not? There is obviously a monopoly in the market, and it should be on the radar.

I ask the officials to advise on some of the other costs that arise in business, particularly commercial leases, mortgage arrangements, rates and utility costs. I hope the Department is providing some dashboard particularly to the private operators which probably do not have the backup that the larger community ones do, in terms of having people with skill sets to renegotiate in this new environment with utility providers, mortgage providers and landlords.

Ms Bernie McNally

I thank the Deputy for his question. Insurance is a major issue for the sector, and it is particularly difficult and challenging that there is only one major provider. There is one other small provider, but it is really only main one. From evidence we know that insurance costs represent approximately 1% of the sector's cost. Staff salaries etc. come to 70%. The Alliance insurance cost for a child in full-time care is about €60 per child per year.

Regarding the risk of the sector, we would say this is a heavily regulated sector. There are a number of safeties built into that which should be factored into any consideration of insurance and risk. People in the sector will say they feel overregulated. There is a Tusla inspectorate and a Department of Education and Skills inspectorate. Health and safety, and other regulators also have a role in the sector.

We were due to publish the Crowe independent review of costs in April, but unfortunately Covid struck us. The three or four weeks' work that we had to do on it had to be postponed because Covid has taken over for us. We hope to publish that review fairly soon and it gives considerable information on the costs in the sector. That would be very useful in future considerations of insurance and how to get better value for money.

Will the Department provide any expertise to people trying to renegotiate utility and other costs? The officials might give me a written response on that.

The sole traders obviously fell outside the scope of the Covid supports. Have the Department any way of supporting them? Is it undertaking any mitigation exercises to allow them to come back into the marketplace which will be extremely difficult if they have not been able to cover their full costs over recent months? For small businesses, dealing with Departments and trying to claim subsidies tends to be very onerous. Does the Department have a digital dashboard in place in order that people can do this quickly and efficiently? One of our contributors this morning spoke of having to give up 12 to 14 hours a day with the children to spend all her time managing her business. I ask the witnesses to comment on that as well.

Ms Bernie McNally

On the sole traders, it was regrettable that of about 4,500 providers in the sector, more than 1,000 are owner-managers who were not on the payroll. Therefore, when the Revenue temporary wage subsidy scheme was developed they had no option to go on the temporary wage subsidy scheme as they were not on the payroll. Their only option was the pandemic unemployment payment, so we could not top them up. We topped up other providers but we could not top them up because they were not on the Revenue scheme and our scheme layered on top of that. That was regrettable. What we did to assist them was give them overheads and we continued to make 15% of their staff costs or about 10% of their operational costs available to assist them with other overheads. As the Secretary General mentioned earlier, from 29 June they all will be able to open their doors again so they will have access to that €75 million just like others, including the capital and the reopening grant. They will not get the temporary wage subsidy scheme, so they will be missing out on that again. In speaking to the sector about this, we have told them that if they can get another two children it would match their pandemic unemployment payment, and if they can get three extra children it would give them more income. The doors are now open and they can come back in from 29 June and avail of this. We hope that, come September, demand from parents will increase even further and the funding they can access through our schemes would therefore come back as normal.

I thank Ms McNally. The next speaker is an Teachta Michael Collins.

The Department's flagship service is the early childhood care and education, ECCE, scheme for seasonal services but it is barely sustainable for providers. If childcare closes down in a village or town, that learning in the community is lost. I have a number of questions for both Dr. Lynch and Ms McNally. I will read them out and they might be able to answer them now but if not they might provide a written reply later. Why did the Department pull all ECCE funding, which had devastating consequences for services? Will the witnesses guarantee that they will never consider doing this again? Why are no operational costs being covered? How many services do they expect will close this year and if that happens, where might they be located? Have they done a financial analysis of the situation? Finally, in America, they have what they call "preschool deserts", where there are no preschools in many communities. Do the witnesses think that is a possibility here in Ireland? Rural Ireland in particular is a big worry for us going forward. I would appreciate if the witnesses could answer those questions. I can repeat some of them if I was too quick reading them out.

Dr. Fergal Lynch

We will answer as many of them as we can as quickly as we can. Just to be clear as regards the ECCE funding, when we moved to the new funding model of the temporary wage subsidy scheme for childcare, we basically repurposed our money. The difficulty was that, while leaving the ECCE funding in place would have been fine for ECCE providers because it funded pretty much the full cost of what they were being exposed to, only 58% of all the funding comes from the State system, as I mentioned in my opening statement. Therefore, the non-ECCE funders which are full-time providers of services would have continued to be at a major financial disadvantage. We needed to spread the funding across a larger number of providers and while it was reasonable to continue the ECCE funding for the first few weeks from the middle of March to early April, after that it was clear that we needed to move to a different model, and that is what we did. As to guaranteeing never to do it again, we need to look at the circumstances in each case. Hopefully we will never go back to a situation where we need to close providers but that was a very difficult situation.

In terms of the number of services closing, I mentioned earlier that we have notification of 18 closures but that 17 new services have indicated an intention to open. That is not unusual. Every year a number of services open and others close. The total number of places has increased significantly each year.

On the danger of there being a preschool desert, we hope that will never happen but we need to look at each part of the country and support the provision of services as best we can. That very much depends on demand and supply in different areas. As already stated, it is difficult to predict with any degree of confidence or certainty what the level of demand and supply will be over the next number of months. We are facing into an uncertain period, there is no doubt about that. The original funding model finishes on 28 June and the new funding model that will come into place on 29 June is based on trying to support, as much as we possibly can, the provision of childcare in an efficient, fair and reasonable way. Above all, we need a model that works for the benefit of children. We recognise that it is a very difficult environment to be operating in. We know that childcare providers face a very difficult situation at the moment. We have been as helpful as we possibly can in terms of developing a model that would assist them in the context of their operations. We have been as helpful as we possibly can with regard to explaining and supporting the public health requirements, including play pods. We are hopeful that we will have a reasonable number of well functioning services operating from 29 June.

Dr. Lynch said that 18 services are closing. Are they in rural or urban areas?

Dr. Fergal Lynch

I do not have information on that. I can get it for the Deputy. There are also 17 new ones.

Following the question on insurance costs, in the session which preceded this one we heard that some insurance companies are refunding money to crèches which have not been open for the past three months but that others are not. For a crèche which is not open, there is absolutely no insurable interest whatsoever. Given that all of these moneys come from parents and the Exchequer, is this something the Department will take up with insurance companies? I am aware that the Minister for Finance met insurance companies to discuss issues relating to car insurance some time ago.

Dr. Fergal Lynch

We expect to be working very closely with other Departments on insurance issues over the next number of weeks and months. This is a matter that we can raise. As I understand it, a number of insurers have extended their terms for three months so that the next insurance bill will fall due three months later. If there are any instances where insurers are not giving refunds that is an issue of concern that we would certainly raise in the context of the work we will be doing on insurance generally.

I greatly welcome that, particularly in view of the fact that we heard from our previous witnesses that there are instances where some insurance companies are not giving refunds or are not extending the time limits on cover.

My next question pertains to the administrative burden on small crèches, many of which began operating in people's homes as a form of self-employment. We heard from a witness that she was up until midnight filling out forms. It is like the GP system, where the State wants to load all of the administration, insurance, risk and cost onto individuals and get a universal service in return. Does anybody ever think about lessening rather than increasing the administrative burden on childcare providers?

I appreciate that there is a tendency for civil servants to just say, "Oh, we will create another form for people to fill in", without ever thinking that this is something ordinary people have to do and that they cannot just walk away and not do it. This is not a nine-to-five job and it involves people sometimes staying up until midnight, trying to fill in forms. The same is true of GPs but I have more sympathy for childcare providers because they are typically less well remunerated than GPs.

Ms Bernie McNally

We accept that is a problem for the sector and, genuinely, we do not set out to have them spend all their time on paperwork. However, there are two reasons for much of the administration. One of these relates to regulation and regulatory requirements, which is coming from the perspective of child safety and child protection, so there is a certain amount they need to do. We have seen the impact that poor regulation has on children and families, so it is right that there is a strong regulatory regime. I note the draft programme for Government. The previous programme for Government looked to us to streamline various inspectorates and so on, and we will work on that. The second aspect of administration is associated with those services that are getting Government funding. If they are not running any Government schemes, there is not that much paperwork. If they are running our schemes, because they are in receipt of Exchequer funding, there are a certain number of rules attaching to that.

We are trying to lessen the burden. For example, the national childcare scheme is a more IT-based system and the burden for providers will be lower with that than it was for the old community childcare subvention and training and employment childcare schemes. That is one tangible example of what we are doing to try to reduce the workload on them. We have also given extra funding and, for example, we have given the programme support payments to recognise there are a lot of the administrative demands on provider. The system we used in the past, PIP, is going to be replaced over time with the more user-friendly Early Years Hive system. The latter will be easier for providers to operate.

I greatly welcome that. With regard to the fact that it is computer-based, I have received complaints from childcare providers in areas where there is relatively poor broadband connection that they simply cannot download these forms and cannot interact with the system. I urge the Department to take into consideration that not every place in the country has the same quality of access to the Internet as a Department in Dublin.

Our witnesses can take that as advice. I call Deputy Carthy.

I thank the witnesses. I have been speaking in recent days to numerous childcare professionals, not just the representatives of organisations but, in particular, the people who from this Monday onwards will be on the front line, to ask them what questions they would like asked. The predominant issue that has been raised with me is one that was touched on earlier, namely, the standards that will apply to those in the childcare sector from next Monday and the apparent disconnect with other sectors. Other matters raised with me include the provision of PPE, the physical distancing that will be in place and the length of time people will be in the same room. What has the Department done and what will it do in order to safeguard those who work in the sector? What protections and guidance are being provided? What mechanisms are in place to respond to instances where a cluster of Covid-19 appears in a childcare facility?

Mr. Toby Wolfe

To be clear, the advice that is being given to providers on public health is from the Health Protection Surveillance Centre, HPSC, within the HSE, so it is evidence-based advice. The HPSC has looked at the specific context of the childcare sector in terms of the risks around children and the evidence relating to coronavirus in children. It has also taken into account the regulatory context of the sector. This is a sector that is well used to infection control measures and it is regulated.

The advice it has given is to have measures in place to reduce the risk of infections coming into centres. That means, for example, if a child or an adult has symptoms, he or she does not attend. There is also the notion of play pods whereby children and adults are kept in small groups that do not interact with each other. That reduces the risk of the spread of infection. The HPSC also has quite comprehensive advice on infection control, cleaning of toys and equipment and so forth. There is quite substantial guidance from it.

My time is short. What will the Department do if it gets a telephone call to inform it that there has been an outbreak of Covid-19 in which several staff members or children have contracted the virus? What will its response be?

Mr. Toby Wolfe

In the first instance, it is a matter for the public health officers to deal with the matter in terms of making assessments as to whether there is a need to do the contact tracing or for any measures to be taken in the setting. There is also a requirement for Tusla, which is the statutory regulator in the sector, to be informed of any outbreaks of notifiable infections. Services are required to inform Tusla very quickly. It is a public health decision as to whether any measures are taken. However, the key-----

I get that and I thank Mr. Wolfe. The point is that I want to get an understanding of the decision-making processes that operate within the Department. We heard this morning from the representatives of healthcare workers about broken promises and the litany of correspondence relating to childcare needs that went unanswered. We also heard in the preceding session from the professional bodies. They stated that there had been absolutely no consultation regarding the so-called home supports scheme. Anybody who has an inkling about childcare knew as soon as that scheme was announced that it was not going to work. Earlier one of the Department's speakers indicated that there was no time to consult. Did anybody at senior level in the Department say that this was a bonkers scheme that would not work? Did anybody at a senior level say that the scheme would not work without the insurance and other supports that would be required and, therefore, that the Department should not be raising the expectations of our most important workers, those in the healthcare sector, by announcing the scheme?

Ms Bernie McNally

I respect what the Deputy is saying, but this scheme had worked elsewhere. There was an initiative elsewhere in the country that had matched 1,400 childcare workers to the homes of front-line workers. We had seen that and we had spoken directly to the people running that service. It had worked. In fact, we also had representations saying that in the best interests of children and to protect them and, indeed, the staff from Covid-19 it was the single best way of ensuring that we did not spread infection. Certainly, that was in our minds and in the minds of those in NPHET, the Department of Health and other colleagues who were working on this. It might have worked had other issues been addressed.

Is the answer to the question that nobody raised a concern about its viability?

Ms Bernie McNally

I am sorry, what was that?

The answer to the question, therefore, is that nobody in the Department said that it might not work.

Ms Bernie McNally

It could have worked if some issues had been resolved, but it was not possible to resolve all of them. For example, the insurance issue was beyond our control.

Deputy Colm Burke has ten minutes.

I might not take the full ten minutes, but I have a number of questions. I thank the witnesses for their presentation and for all the work that has been done. It has been a challenging time for everyone in all Departments and for all people involved in this area. I have a question about the development of childcare generally. In other countries, big employers in particular are extremely supportive of their employees in providing childcare facilities. Not far from where I live in Cork city there is University College Cork, Cork Institute of Technology, Apple and Cork University Hospital all of which are big employers. I am not sure about the childcare facilities available in those places.

Is it time to look at this issue and to work with major employers, such as the hospitals, in order to provide, in addition to other supports for staff, childcare supports close to their facilities? Has the Department looked at that? It is being done in other countries. Have we ever thought of looking at that area, particularly in the context of people working in the healthcare sector in very large hospitals?

Ms Bernie McNally

It is a market model. To go back to some of the other Deputies' questions, I am not sure Ireland ever set out to develop a private childcare sector but that is what it is at the moment - a market model. Many organisations, including a number of hospitals, have built crèches or provided accommodation. Certainly, a number of big organisations have done so. We have worked with the Department of Business, Enterprise and Innovation to assist any companies looking at doing so. Our schemes, including the national childcare scheme and the early childhood care and education, ECCE, preschool scheme, are available to anybody who wishes to set up a childcare service in those entities. Clearly, the parents would have to be eligible but, once they are, the organisation could attract State investment.

In real terms, however, the involvement of major employers has been very low, regardless of whether they operate in the healthcare sector or in private enterprise sectors such as those relating to technology, pharmaceuticals or whatever. Is there a need to look at that and to see how we can all work together to develop more comprehensive services in the area of childcare? We certainly have a lot of ground to make up in this regard.

Ms Bernie McNally

Access and ensuring that there is adequate capacity is really important for the Department. There is broadly enough access for the free preschool scheme but we know that it can be very difficult to get a childcare space for children under three. We absolutely note the Deputy's comments on working with large employers in the future.

Have we looked at other jurisdictions to see what we can gain from them and at what we can implement in a reasonably timely manner to deal with the new challenges arising?

Ms Bernie McNally

We look at international examples all the time. There are a number of international experts on our funding model expert group. In everything we do, we are building infrastructures, schemes and systems that will work regardless of the future model. The most direct answer to the Deputy's question is that the funding model group can look at that and is doing so. It is not the central point of its existence but it is within the terms of reference.

Dr. Lynch stated earlier that approximately 40% of facilities would normally be open at this time of the year. That is approximately 1,800 out of 4,500 providers. He may have answered this question already but, of the 1,800 Dr. Lynch said would normally be open at this time of the year, does the Department have any indication as to how many will open from next week on?

Dr. Fergal Lynch

We have some indication but it is preliminary so I would be loath to be definitive about it. We carried out a survey of providers recently and we are just analysing the results. I stress that these are initial provisional results but the survey response as of now indicates that approximately 84% of those providers propose to open over the course of June and July. That is good news. A further 8% indicated that they may open. Adding this 8% to the 84%, we see that approximately 92% indicate a probable intention to open. That is not to say that absolutely every one will open from 29 June; some may open a little later.

It gives us cause for cautious optimism that there will be a significant number of providers out of that 1,800 who will open during the course of June and July. That is very much what we want.

Evidence was given earlier that insurance, although a significant cost, accounts for only 1% of childcare facilities' costs. I referred earlier to what might need to be done in regard to cover for health service providers, where there is a difficulty in getting insurance. A number of years ago, one or two of the main insurers pulled out of the market. I understand from what we heard today that there is only one insurer operating in the childcare sector. Do we need to have a plan in place in case that insurer decides for some reason or another that it is no longer interested in the Irish market? Should we be working towards what is happening in the health sector, where the State is looking at being involved in providing insurance cover where it is required?

Dr. Fergal Lynch

In terms of the insurance position in the childcare sector, everybody agrees that it is far from ideal that there should be only one provider. Ideally there would be competition and that would always be very welcome. I am not trying to overstate the matter but the costs are relatively low. Ms McNally indicated that the average cost at the moment is €60 per child per year, which is probably quite favourable by comparison with costs in other sectors. This is not to say that in individual circumstances or in a number of cases, childcare providers are not concerned about the costs to them, but it is a relatively reasonable cost at the moment in many instances. However, we are concerned that there is only one provider and we would very much welcome more providers in the market. We will be doing work in that regard with other Departments over the next while. There is a wider issue in regard to insurance generally but, certainly, insurance in the childcare sector is something of concern to us and we would like to act sooner rather than later to see what is possible.

In terms of State involvement, that would be a Government policy decision. For now, we will do what we can to ensure there is a proper service provision for the future. This is something that applies across government rather than to the childcare sector alone.

Do we have any idea of the total number of claims in any one year against childcare facilities? We have talked around this issue quite a bit today but no one has actually given a figure for the total number of claims in this area. I am wondering if it is possible to get that information.

Dr. Fergal Lynch

It is not information we have at the moment but we can check it for the Deputy. One of the witnesses earlier referred to her own particular experience in this regard but I do not know whether it is representative. It is probably reasonable to speculate that given the low cost of insurance - €60 per child per year, as I said - there is not a very high degree of claiming. Certainly, when people in the sector were expressing concerns late last year about rising costs, the point they were making, among others, was that the increases were not the result of major claims or a major number of claims. If we can get the information the Deputy is seeking, we will pass it on to him but I do not have it at the moment.

I thank Dr. Lynch.

I thank the departmental officials for their presentations. When one contributes towards the end of a debate, it gives one the opportunity to see what questions were not asked. Those are the ones I will focus on rather than repeating points that were already raised. During an earlier session today, I referred to reports in today's newspapers of a statement by the Federation of Early Childhood Providers which included the following warning:

The Department don't even understand their own package of supports for the sector, which fall short, will force children with additional needs to stay at home and leave a massive black hole in the finances of early years providers.

That is a very bleak assessment and it will leave many providers and parents worried.

Does the Department feel this is a fair assessment of the support? What basis is the Department using to calculate the appropriate level of financial supports needed for crèches now and in the future? Perhaps Dr. Lynch would please answer me.

Dr. Fergal Lynch

With the greatest respect to the federation, I simply do not agree that we do not understand our own package. We spent a lot of time working out what an appropriate evidence-based set of supports would be. That is why we worked out what we thought was an appropriate set of supports. To claim that we do not understand them just does not hold water.

I think it is fair to say that in the advisory group, the overall reaction to that package has been broadly positive. Inevitably, when people are commenting on it in public, it is understandable that people say they want more or need more - that is to be entirely expected - but we sought to sit down and work out, on the basis of the information and data we had, an appropriate, fair and reasonable package of measures that would ensure providers were supported to provide a reasonable service in June and July. That is exactly what we did. We brought it to the Government and it was approved on that basis.

Regarding children with special needs, I think it is important to emphasise that it is already open to providers to provide that service to people with special needs. The childcare providers themselves are trained and the staff ratios are such that it is possible to do that. Better Start will be offering supports. The applications have already started for the access and inclusion model, AIM, system which kicks in for ECCE from September. I think in overall terms it is reasonable to say that the provision of service that we have planned and supported is carefully thought out and is certainly not one that is not understandable or that we do not understand. We have put a lot of work, time and effort into it. I stress that it was developed with considerable input from the sector itself.

I thank Dr. Lynch. My follow-up point is that when the providers were here earlier, I referred to the July provision and the August provision but none of them seemed to be clear about what Dr. Lynch has said about them being in a position to make provision for children with additional needs. There was not a clear understanding of that. Is Dr. Lynch telling me now that come 29 June, children with additional needs can be incorporated into services?

Dr. Fergal Lynch

What I am saying is that has always been the case. The providers have been trained for that purpose. I think they were looking for a specific provision of an AIM-type service in June and July.

Yes, the July provision is what they call it in education.

Dr. Fergal Lynch

Yes. Unfortunately, that has not been possible, in the sense that we had to focus on getting the services up and running to provide the service that they would typically have been providing in previous years, so we focused on that. The point I was making was that it in any event it is open to services and they are trained to provide services for children with a disability. If the impression is being created that it is simply not possible at all to cater for children with a disability in July or August, then I think that is not the case.

Is it the case that none of the funding package of €75 million that was allocated to the reopening of services in phase 3 of the roadmap includes funding for providers to provide AIM staff to support children with additional needs?

Dr. Fergal Lynch

No, Deputy Rabbitte is correct there. As I say, what we aimed to do this year was to provide what we would have provided in other years. The AIM provision would normally start in September alongside the ECCE scheme and that is the situation that will apply this year as well.

I will finish to this point and move on to the next question then. This is not normal for the simple reason that these children are the ones who are most in need and they thrive on routine and early intervention. Part of it is that those parents are hugely frustrated and they need to get their children back into it. It is the childcare providers who are getting the brunt of this because they are trying to work to a very tight funding model and funding is not available to incorporate children with special needs. I thank Dr. Lynch for answering the question. I fully appreciate what he said.

Dr. Lynch also touched on the ECCE programme and he referred to September.

Will the ECCE scheme be returning in September? There was much confusion and anxiety earlier on regarding where the funding model is going to go from August. Will our guests clarify if we are going to have ECCE in September? Has the Department worked with the Department of Public Expenditure and Reform on it? Has the Department had the conversation around the next phase of funding?

Dr. Fergal Lynch

That is a very important question. We are working now and will be over the next number of weeks on the funding model from 24 August onwards. We are very conscious that providers want clarity and want to know, as quickly as possible, what that funding model is going to look like. We cannot say with absolute certainty what each component of it will include but we will certainly consult them. We will provide the full funding model as quickly as we can.

On the components, it would certainly be our hope that ECCE would resume in the normal way from 24 August. Obviously, that is down to an approval from the Government for a complete package which would include ECCE. It would also include what we have already announced, capital grants and reopening grants, which will apply to services that are opening in September as well. It is important to stress that the capital grants available for services opening in July and August will be available to services in September as well, as will the reopening grants. Our hope is that the ECCE component will be available as well. We need, however, to work out the whole scheme before finalising that. We are very conscious that providers want to know as soon as possible what that will be.

Does the Department believe that there is merit in the temporary wage support scheme being put on a permanent footing as a new model in the context of childcare? It would reduce the cost to parents and ensure staff earn a decent wage. I am sure this was Dr. Lynch's concern on 13 March. I remember ringing him on that particular day to ask what the difference was between what the shortfall was to ensure that we could hold on to the highly-trained staff and give reassurances to the providers. Subsequently, the Department has done all of that. The Department has been analysing this. Do our guests think there is merit in putting it on a permanent footing?

Dr. Fergal Lynch

I will be careful in how I answer because this will be a policy issue for the Government. The Government will need to decide what it is doing with the temporary wage subsidy scheme. It has indicated, as of now, that it will extend it to the end of August. A decision has to be made thereafter. What I am clear about, from the Department's point of view, is that we need to develop a workable funding model that would include either the temporary wage subsidy scheme, if it is in place at that point, which is a matter for the Government, or some other appropriate funding mechanism if it is not. Obviously, the decision on a temporary wage subsidy scheme, its duration and whether it would be extended beyond the end of August, will be one for the Government in the first instance.

Everybody has touched on insurance. When did the Department know that the insurers would not cover front-line workers as part of phase 1 of our roadmap?

Ms Bernie McNally

Very early on. We started to work on childcare for healthcare workers in the middle of March. We made our first submission on 15 March. Very early on, the insurers told us that they would not cover Covid-related claims. We did not accept that. We tried to push that for an extended period.

I thank Ms McNally very much for being very honest in that. It is important to know the position.

I am going to delve into something that I suppose many new Deputies would not be aware of, namely, how complex the whole childcare sector is. Deputy Funchion is here with me. We sat on the Joint Committee on Children and Youth Affairs in the previous Dáil. We know exactly how complicated the sector is. One has the private, the community, the various NGOs and everything else.

I want to go back to this expert advisory group and then the reference group. Why can we not have had everybody sitting down at the table together in order to have an input from the unions, the NGOs, community and private providers? I admire all the good work by everybody but I believe the dots are not being connected. In the context of the latter, one could see, looking around the Chamber this evening, that there was confusion around the questions. Maybe that is coming up because not everybody's voice is being heard. I know that this goes back to last September but since then we have had the insurance issue and the march on Merrion Square.

We have also seen the emergence of various organisations in the interim. They bring a voice and a weight because they represent so many people. Does Dr. Lynch believe that everybody should be at the same table in order that there can be a cohesive voice and that the Government and the Department can give a cohesive answer? At the moment, it seems to be very disjointed and, as one Deputy described it earlier, fractured. This is not good for parents, for staff or for the sector. When what I have outlined obtains, there is lack of communication. How can we rectify the position?

Dr. Fergal Lynch

There are a number of elements to that. I agree it is important that we pull these different strands together as much as we possibly can. I would not want to leave the Deputy with the impression that there has been fragmentation throughout the system. We have had a well functioning early years forum for quite a period, which the Minister set up some years ago. The advisory group we established recently for the current scheme has, I believe, also functioned well. Certainly, the Department would be open to working with all the key stakeholders to ensure that we develop solutions for the future. This has worked very well for the scheme that is to start on 29 June. For future endeavours, we will certainly be happy to look at that model also.

That would be greatly appreciated. I am hearing - and Deputy Colm Burke said it earlier - that they are having problems logging on to the system. They feel they are being left out. We need to have joined-up thinking. If the Department could look at the model of including everybody, then we could go in the right direction. I thank the Acting Chairman for his leniency.

The Deputy might be talking herself into a job. I am the next speaker and I have a number of questions for Dr. Lynch. Perhaps the ten minutes could be put on the clock. When they have lapsed, out session will be over.

I have a follow-up question to that asked by Teachta Matt Carthy earlier, which I believe was not fully answered. The Deputy asked about the childcare scheme which was put in place for front-line health workers and which did not work. Did anyone in the Department raise a red flag to indicate that the scheme might not or would not work? The question may have been directed at Dr. Lynch and the buck stops with him as the head of the Department. Did he or any of his senior staff raise concerns that the scheme might not work? When she responded, Ms McNally said that they hoped it would work. That was not the question that was asked. The question was not about whether the Department hoped it would work, it was about whether people within the Department had concerns, or had articulated concerns, to the effect that maybe the scheme would not work. Will Dr. Lynch answer that question directly if he can?

Dr. Fergal Lynch

We identified the risks associated with each element of the scheme, which we always do when we are working out a scheme of this kind, such as what could go well and what could go badly. We identified a number of specific items we felt were potentially problematic. The first of these was insurance, and so it proved to be. Second - this emerged later - was the concern raised by individual providers about rest breaks and arrangements of that kind. In each instance, it is fair to say that we identified what the risks were. As Ms McNally said earlier, we identified those risks but at no stage did we think that the scheme was "bonkers", which was the term used by Deputy Carthy. We never believed that the scheme was bonkers. Neither did we believe it was doomed to failure. There were issues that needed to be overcome, and we were very much influenced by the fact, as referred to earlier, that there was an informal scheme then functioning - organised in an informal way - which got over all of these issues. Insurance did not become an issue and the question of supervision did not become an issue. Neither did any of the other concerns that were raised in the course of the process. At no stage did we believe that the scheme was doomed to failure. At no stage did we believe it was bonkers. We had identified correctly a number of specific risks. We mitigated all the risks we possibly could but there were a couple that were outside our control, including that relating to insurance. That is the way we moved forward.

As I only have ten minutes, I ask the witnesses to facilitate back and forth discussion. Dr. Lynch is in a different room and I am not sure whether he heard me.

Dr. Fergal Lynch

I did not. Apologies.

He stated that the Department identified risks and I understand that completely. The risks it identified related to insurance and the concerns raised by providers. He stated that he did not believe the scheme would fail. Did the scheme fail?

Ms Bernie McNally

May I respond to-----

No, it is a question for Dr. Lynch.

Dr. Fergal Lynch

I am not sure what point the Acting Chairman is making. I apologise; I missed the end of the question.

Dr. Fergal Lynch

Yes, it did. I am not clear on the question the Acting Chairman is asking.

Teachta Carthy made the point that the Department did not anticipate that the scheme would fail, but it did. How is it that nobody in the Department was able to identify that the scheme was flawed and would not work?

Dr. Fergal Lynch

As I stated previously, a similar scheme was functioning. We reached the conclusion that we needed to put it out to the system to see the extent of interest in it and take-up of it.

Part of the problem was that there was announcement after announcement by the Minister in particular that a scheme would be put in place. That raised people's expectations that a scheme that was going to work would be available. However, as we know, the scheme failed. Is it not the case that the expectations of front-line workers were raised? Dr. Lynch stated that his staff put significant time and energy into devising the scheme and other required supports. I do not doubt that for a second.

The people who were most frustrated and challenged were front-line healthcare workers, particularly those in households with two members working on the front line. Those workers feel let down. The committee heard from their representative groups this morning. Does Dr. Lynch accept that those workers were let down, their expectations having been repeatedly raised? They waited four weeks for the plan to be announced, but when it was announced, it did not work. Notwithstanding what he stated regarding the effort put in by departmental staff, does he accept that those workers were let down by the Department because the scheme took so long to be put in place and then failed, and that their expectations may have been raised unnecessarily?

Dr. Fergal Lynch

I accept that we found ourselves in an extremely disappointing situation. We had no wish to raise expectations in respect of a scheme that was going to fail. We never would have done so. We were faced with extremely difficult circumstances and, essentially, only one option. We had no wish to raise expectations or give the impression that we were going to go ahead with a scheme that we secretly knew would not work or anything of that kind. We genuinely believed there was a very good chance of the scheme starting. As with so many of these issues, if one can get the scheme up and running, even in a modest way, it can gather steam thereafter and work. It was part of our hope that it would work on that basis. Unfortunately, it did not work because the extent of interest early on was very low. As I stated, and I think the Acting Chairman acknowledged, the scheme did not fail for the want of trying on the part of the Department.

I acknowledge that. Dr. Lynch earlier discussed identifying the risks. Was a formal risk assessment carried out? If so, could any existing documentation relating to identifying those risks be provided to the committee?

Dr. Fergal Lynch

I do not think there was a formal risk assessment. There was a discussion and itemisation of the various elements of challenge and risk that we would face. To my knowledge, everything of that nature was released under freedom of information. I will check that.

I ask Dr. Lynch to carry out that trawl and pass on to the committee any additional information relating to the risks that were identified.

I think Dr. Lynch is stating is that there are two elements to the expert group that is examining the funding model, that is, the immediate and the medium to long term. Is the group looking at funding a State-led early childhood education system? Is part of its remit to look at the cost of rolling out a State-led early childhood education system?

Is that part of the modelling that is being considered?

Ms Bernie McNally

We have done some costings on a State provided childcare system. For example, were we to pay all those people with degrees a teacher's salary and those with a Level 5 or 6 qualification an SNA salary we would probably need about €1.6 billion extra for centre-based services. Were we then to replace and reduce parental fees, as one can imagine, it would cost a lot more money on top of that. Were we to buy out the capital assets it is a lot more than that. A public service model is a minimum of an extra €2 billion or it could be €5 billion but it is a significant amount of money.

We wanted the expert group to have an impact very quickly. We did not want it producing something that we would need an extra €3 billion to implement. Its terms of reference at the moment have more to do with how can we move in an incremental manner, how can we control fees for parents, and how can we improve the quality and pay the workforce, and not specifically on a State-run model.

I shall return to the points made by Teachta Barry earlier, which were acknowledged by the Secretary General in terms of the report by the Oireachtas Library and Research Service and its critique of the sector, the lack of funding and all of the other challenges. Ms McNally has said that her Department has modelled a fully State-led system. She also said that the range could be between €2 billion and €5 billion, which is a huge range. We need to reach the point where we have much more accurate readings and costings. Can she provide this committee with a breakdown? If I understood her correctly she said that the range from €2 billion to €5 billion depends on what is done by the Department such as whether it pays the staff costs, the parental fees or takes over the assets. The cost will rise depending on what is done by Department. I ask her to pass on the information on the model to us and the cost of different transition elements as it would prove useful.

Ms Bernie McNally

I will do that.

I am finished. Does any Deputy wish to avail of the remaining three or four minutes?

I shall follow on from where Deputy Cullinane finished talking about the costing of the entire model. I ask the witnesses to correct me if I am wrong about the following. Did it cost €150 million all-inclusive for everything to be paid for the 11 weeks? If so, does that mean, if one multiplies it out, a fully funded public childcare model, without fees coming in, would cost the State €750 million to pay the wages for everybody who works in the sector?

Ms Bernie McNally

Certainly paying existing rates, which average at €12.55 an hour, would be a lower cost. The costs that I just gave are if we gave teacher and SNA equivalence so that is why there is a higher amount. We will come back to the Deputy on those numbers.

I thank Ms McNally.

I thank our witnesses today for their attendance and for the information provided for today's meeting. I thank the Secretary General and his staff for a very frank engagement, which was very helpful.

Is it agreed to request the Clerk to seek any follow-up information and carry out any agreed actions arising from the meeting? Agreed.

The committee adjourned at 6.30 p.m. until 9.30 a.m. on Thursday, 25 June 2020.