Tuesday, 10 December 2019

Questions (60)

Maureen O'Sullivan


60. Deputy Maureen O'Sullivan asked the Minister for Children and Youth Affairs if she has raised or plans to raise the issue of insurance for childcare facilities with an organisation (details supplied); her views on whether increased costs of insurance for registered facilities are having a detrimental impact on the industry; and if she will make a statement on the matter. [51334/19]

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Oral answers (6 contributions) (Question to Children)

My question relates to insurance issues for childcare facilities. It concerned a particular organisation but it is a general question relating to the increased cost of insurance for registered facilities and how this is having a detrimental effect on the industry.

Childcare services in this country are provided by more than 4,500 private or not-for-profit services. My Department engages with the services regularly through a number of organisations and representative groups.

Insurance costs and risks associated with this area for early learning and care and school age childcare services have very recently been flagged with my Department, and my officials are looking into this and engaging in a process. Information suggests that while insurance costs are a concern, to date they are not as significant an issue in this sector as in others. However, my officials have just been informed that one of the two underwriters currently in the Irish early learning and care sector insurance market has decided to withdraw from this jurisdiction. The broker involved has written to the services affected noting that, although the insurance market is at present restricted in this area, it is working hard to organise a smooth transfer to a new insurer. My officials are carefully examining the current situation and any challenges that may arise in the short to medium term. My Department has not entered discussions with the organisation mentioned, but will consider the suggestion of the Deputy as this work progresses.

Early Childhood Ireland, a national organisation representing about 80% of early learning and care and school age childcare services in the country, operates an insurance scheme for its members. Many avail of it, and my officials will be engaging with Early Childhood Ireland as this work progresses.

My Department oversees a case management system through which Pobal and local childcare committees offer assistance to services experiencing financial or governance difficulties. There have been some individual cases in which insurance costs have been a factor, but it has not been a primary focus to date. These services continue to be offered supports by my Department, tailored to their individual circumstances through a case management process. I will be happy to report back to the Deputy when my officials have completed their consideration of the issues raised.

I thank the Minister for the reply and it is good to know her Department is working on this. It is a reality that there is a higher cost of insurance, unless all of these issues just happen to be in the constituency I represent. This was raised on Leaders' Questions today. We know it concerns childcare, preschool, adventure centres and many other places that involve children and that have children moving and active, which we know is important.

None of these things happens overnight. Senator Ó Céidigh's Bill is being progressed, but other Bills could have been progressed before it. There is a link between spiralling claims and spiralling costs. Childcare is just so important, and the Minister knows that better than anyone. She knows the invaluable service it provides, not just for the children but also for the parents who can go back to work. It is certainly very important to those parents in Dublin Central who are in addiction and trying to get out of it and into recovery. As the Minister mentioned, the other insurance broker is pulling out now. If there will be only one insurance company left, it will have the market to itself. It is important that there is engagement with the remaining broker in order that it does not further increase prices.

As the Deputy said, the issue of insurance costs across a number of sectors is of great concern. As she will be aware, the Government is pursuing insurance reform, although perhaps not in the way in which Deputies opposite want it to. Another Minister is in charge of that.

I will add to my initial information further information specifically about the childcare sector. My understanding is that the broker that was working with the underwriter that has pulled out of the market has informed its clients that it is actively seeking a new underwriter with which to partner. I mentioned Early Childhood Ireland, which I commend on its work in this area. It has a group scheme for insurance and has worked with us very closely to ensure that is the case. I encourage any childcare organisations that may have been impacted by the pulling out of the other broker to contact Early Childhood Ireland to see whether this group scheme represents another way for them to move forward with their work, at least in the interim.

The reply from the Minister for Finance to the parliamentary question outlined how there are constitutional issues and then commercial issues. The cost of insurance working group and the Judicial Council Act may have some effect, but in the meantime there are increasing costs for childcare facilities, particularly community facilities. The private ones have other resources they can use that community ones cannot. The ones I know have been told their commercial rates could increase by 3.5% this year. They have had insurance cost increases of several hundred euro. Those few hundred euro mean a lot to small community preschools. They are also complying with all the fire safety work, which, of course, they agree with, but, again, that is a further cost on them. The other cost issue is payment to the staff. The pay is very low. Someone who has done a degree in early childhood care will not get the wage commensurate with holding a degree. This is part of a picture of early childhood care.

I agree with the Deputy. This is putting the childcare organisations in her constituency to the pin of their collar in terms of sustainability. The Department is available to work with, and support, these organisations through some kind of sustainability plan. If they have not asked, they should reach out. I have indicated that we have not heard concerns from many providers. If, however, the Deputy has identified a number that have concerns, I could meet her later and we could look at them and some of the ones within her constituency and see what the challenges and difficulties are in moving forward. As I said, I do not know the fees or the numbers. If, however, Early Childhood Ireland is offering a group scheme, I encourage providers to move in that direction.