I propose to take Questions Nos. 202, 203 and 206 to 208, inclusive, together.
As the Deputy will be aware, I have responsibility for the National Childcare Investment Programme 2006-10 (NCIP) under which the Community Child Care Subvention Scheme was introduced in January of this year. The scheme replaced the previous staffing support grant scheme which was implemented under the EU co-funded Equal Opportunities Childcare Programme 2000-06 (EOCP) and which ended in December 2007. In providing for the new scheme and the previous EOCP support scheme, Government child care policy has recognised the need to target additional supports towards disadvantaged families in addition to the main supports which are made available to parents to assist them with their child care costs — child benefit and the early child care supplement. The latter payment is the responsibility of my office. It is expected to involve expenditure of some €500 million in 2008. These payments are universal and benefit all parents, regardless of their income, labour market status or the type of child care they choose.
The Community Childcare Subvention Scheme has an allocation of €154.2 million over 2008-10 and will continue to support and ensure the sustainability of community-based child care services which provide reduced child care fees for disadvantaged parents. This compares favourably with the €37 million the EOCP staffing grant scheme cost in 2007. Community-based child care services will qualify for grant aid on the basis of the level of service they provide and the profile of the parents benefiting from the service. The parent profile of each service and the amount of subvention it receives are determined on the basis of completed parent declaration forms which they return as part of the application process. The subvention received by services is, in turn, reflected in a tiered fee system under which reduced fees are charged to parents who qualify as disadvantaged under the scheme.
While this constitutes a significant increase in total grant aid, the targeting of support towards specific parents, as opposed to general grants made to services in respect of self-reported profiles, was always expected to result in some services, which had a weaker focus on disadvantage than reported, facing a reduction in funding, particularly if they had not implemented tiered fees as required under the previous scheme. The review of the scheme, based on the data returned by services last November, saw the introduction of guaranteed floors below which funding would not fall, provided the level of service was not reduced. This means that, where a service has very low levels of subvention due to its parents being middle and higher income, they would receive a top-up to 90% of their existing funding in the second half of this year, to 85% in 2009, and to 75% in 2010. The purpose of this was to allow services to introduce on an incremental basis tiered fees to make their services accessible to disadvantaged parents, as they had been required under the EOCP staffing scheme. In reality, it is expected that in 2009, most services will not require this top up funding as they will be more affordable to lower income families and their subvention levels will have increased. It might be remembered, however, that the effect of this is cost-neutral to the service as, whatever the eligibility of the parent, the fee charged plus the subvention (where applicable) is equal to the cost price of the child care place.
I am informed that some 46% of services are in receipt of 90% funding in July-December, with a further 7% in receipt of between 90.1% and 100%. On average, services are in receipt of 119% of their allocation in the period January to June and, overall, there is a significant increase, with some services more than doubling their grant aid. No service is facing a significant decrease in State funding. The review of the scheme also announced that the subvention for Band A parents has been increased to €100 weekly for each full-time equivalent place, and the Band B subvention increased to €70. Furthermore, each service has been given a tranche of funding to allow them to subvent low income parents above the FIS threshold, by €45. Given this funding will allow them to offer this reduction to parents who hold GP Visit cards, and given that the thresholds for these take account of mortgage, child care and commuting costs, I think most people would agree that those who fall outside those categories are not lower income and many middle-income parents will qualify for that subvention. Similarly, all parents in services with a top up payment are in receipt of a subsidy, which in some instances is very significant.
These services have the benefit of higher capital grant aid than private services. This is reflected in their cost price, which they charge to non-subvented parents. I am informed that, of the fees policies approved by my office to date, the average price for an full-time equivalent place under the scheme ranges from €43 to €143, depending on the band of the parent. This varies significantly, depending on the cost structure of the service, but is clearly below the commercial rate for child care. To further subsidise the rate for upper income parents in this sector would not be an equitable policy. Given these facts, there is no reason the sector should face issues regarding sustainability as a result of the new scheme. I am aware of a service whose manager took to the national airwaves to announce it was closing because of the introduction of the scheme. However, I can state that the situation is not as presented. The grant funding for the service has not, as was stated, been reduced by over €80,000, from €95,000 to €16,000. The true position is that the proposed grant funding for this service in July/December 2008, based on its level of qualifying parents, was due to reduce from €18,300 to €16,470. The manager of the service had been in contact with my officials days earlier indicating her satisfaction with the new funding arrangements and made no mention of any intention to close. My office is working with the local community sector and the county child care committee, as a matter of urgency, to try to ensure that another community service can take over the operation of the service and its proposed grant funding. As the level of support being given to existing services has increased and the number of services in the scheme has increased I am satisfied that the new scheme will prove an important step in the development of child care in Ireland.