Dáil Éireann Debate, Tuesday - 18 April 2023
1232. Deputy Robert Troy asked the Minister for Children, Equality, Disability, Integration and Youth if he has engaged with stakeholders in the childcare sector regarding unintended consequences of the new NCS funding model; his views on the perceived lack of flexibility with this scheme in terms of part-time childcare; and his plans to review the administration of this scheme. [17017/23]
View answerThe National Childcare Scheme (NCS) is designed to substantially reduce costs to families using eligible early learning and childcare. It is designed to be flexible, recognising that early learning and childcare needs are different for each family.
The NCS was designed following extensive consultations with all key stakeholders (including but not limited to early learning and childcare providers).
It has also been independently reviewed following its first year of operation. That review again included extensive written and face-to-face consultations with key stakeholders as well as surveys.
My Department also engages on an ongoing basis with stakeholders through formal and informal means, including proactively engagement at key points as appropriate. Of particular note is a recent provider stakeholder group which met regularly in the run-up to the increased subsidy rate and which generated a list of actions designed to improve providers experience in administering the NCS, many of which are currently being implemented for the next scheme cycle (currently September 2023 to August 2024).
This gives providers an opportunity to feed back their concerns on the administration of the scheme and systems supporting that administration. That feedback is used to support current and future enhancements as resources become available.
The success of the NCS in meeting families needs is evidenced through the level of participation in the scheme. The NCS replaced the Community Childcare Subvention Plus Scheme and the Training and Employment Childcare programmes at end 2019. In their last full year operation prior to NCS, those schemes supported approximately 85,000 children with investment of approximately €132m. The NCS is expected to support 150,000 children with an investment of €365m in 2023.
On the issue of lack of flexibility, the hours based design of the NCS is designed to fit around the needs of families. The family agrees the number of hours to be used with their provider and (within overall scheme limits) these hours are registered with the scheme administrator.
I am aware of incorrect information circulating that if hours are missed, for example if a child is picked up early one day, that the payment will be reduced. I would like to be clear that this is not the case. My Department received extensive feedback on this matter in the design phase and the NCS has been consciously designed to be more flexible than its antecedent schemes.
To use a common example, a parent registers for 40 hours and picks up their child early on Friday thereby using only 37 hours, the provider would still receive a payment for 40 hours. The parent would need to consistently use 37 hours for 8 continuous weeks before a notification would issue that they are not using the claimed amount and request they adjust this within 4 weeks. This creates a balance between a very flexible system for families whilst ensuring an efficient use of public resources by ensuring public monies are not used to subsidise unfilled places.
Another common example would be a family taking 2 weeks holidays. The subsidy will continue to flow for those 2 weeks.
My Department is currently running additional communications initiatives to highlight the advantages of the scheme and address this misinformation.
In relation to the point on unintended consequences, I assume that the Deputy is referring to claims that the services are requiring parents to pay for a full time place, even though a part time place is all that is required. My Department has received anecdotal reports of this practice. As the Deputy will understand, we cannot subsidise unfilled places because of a lack of flexibility in services own fees model. They are private businesses and they are free to run their model as they see fit within the parameters of the scheme. Decisions to charge parents on this basis are matters independent of the scheme and actions of the Department.
I would note however that the NCS subsidies now form part of a wider suite of funding supports and those supports should facilitate greater flexibility among providers. A key principle of funding of early learning and childcare is that it is family orientated and that in so far as possible, it should be cognisant of the reasonable needs and choices of parents.
On 15 September 2022, I launched Together for Better, the new funding model for early learning and childcare. This new funding model supports the delivery of early learning and childcare for the public good, for quality and affordability for children, parents and families as well as stability and sustainability for providers. Together for Better brings together three major programmes, the Early Childhood Care and Education (ECCE) programme, including the Access and Inclusion Model (AIM), the National Childcare Scheme (NCS) and the new Core Funding scheme.
A key principle of the funding model is that it is family orientated and that, in so far as possible, it should be cognisant of the reasonable needs and choices of parents.
Core Funding, which began in September, is the new funding stream worth €259 million in full year costs to start the partnership for the public good between the State and providers. Its primary purpose is to improve pay and conditions in the sector as a whole and improve affordability for parents as well as ensuring a stable income to providers. Unlike the NCS, it is not a subsidy mechanism for fees rather the payment is made on the capacity of the services (whether places are filled or not).
Core Funding allows for substantial increases in the total cost base for the sector, related both to pay and non-pay costs, without additional costs being passed on to parents. Core Funding introduces fee management, which in year one is a fee freeze, where providers cannot increase the fees charged from last September 2021.
My Department is actively monitoring the issues reported by parents and will adjust policy as required and where the evidence compels such interventions to support accessible and high quality early learning and childcare provision.
