Dáil Éireann Debate, Wednesday - 2 December 2020
102. Deputy Kathleen Funchion asked the Minister for Children, Equality, Disability, Integration and Youth if he will consider increasing the NCS hourly rate of €3.75, despite this being at the higher end given the fact that many providers are struggling to provide their services at this level and are extremely worried about their long-term viability. [40721/20]
View answerThere are a number of subsidy rates available under the National Childcare Scheme (NCS). The rate to which the Deputy refers is the maximum subsidy rate available for school age children.
Higher subsidies are available for younger children, to reflect the higher cost of providing childcare for them because of the higher adult-child ratios required by Regulations.
Subsidies range from a maximum of €5.10 per hour for babies, €4.35 for 1 and 2 year olds, €3.95 for 3, 4 or 5 year olds prior to school entry, and €3.75 for school age children. These reflect ratios of 1 adult to 3,5,6,8 and 12 children respectively. So, for example, in school age childcare services, 12 children can be looked after by one adult. 12 children being charged €3.75 per hour would generate income of €45 per hour. The average pay in the sector in €12.55 per hour and staff costs are estimated to make up approximately 70% of overall costs. It is recognised that staff may be paid for non-contact time with children, and annual leave and other costs accrue for providers. Additionally many services use more profitable parts of their business to cross subsidise those less profitable.
Based on data collected for the Independent Review of the Costs published by Crowe in recent weeks, the average hourly unit cost for delivering childcare across all services was found to be €4.14. This tallies with the work done to identify the appropriate rate for NCS subsidies when the scheme was launched last year. While this data give us some confidence in our levels of State subvention, it is acknowledged that these figures vary across service type and geographical location. Also they represent current costs, and were cost to increase to pay higher wages, subsidies may have to rise accordingly if the additional cost is not to be passed on to parents.
Outputs from the Independent Review of the Costs will form a key input into the setting of capitation and subvention rates for future funding schemes. The development of a cost calculator as part of Crowe's work will assist the Department to accurately estimate the impacts of potential future policy changes on the cost of delivering a service.
Any service providers experiencing financial challenges can seek to access sustainability funding via the Pobal Case Management system. Amongst other benefits, the case management system supports providers in adjusting their business model away from being centred on older legacy schemes. This service provides non-financial assistance or support in the first instance, but financial supports are also available for services facing certain challenges, following an assessment.
As part of the monitoring, review and evaluation of the National Childcare Scheme, section 26 of the Childcare Support Act 2018 requires that a formal review of the NCS takes place after 12 months. The rationale for the review is to identify, in a timely way, any key issues or challenges which need to be addressed. The DECDIY will be seeking input to this review in the coming months from all stakeholders.
