Dáil Éireann Debate, Thursday - 2 June 2022
49. Deputy Donnchadh Ó Laoghaire asked the Minister for Children, Equality, Disability, Integration and Youth his plans to reduce the costs of childcare for ordinary families.; and if he will make a statement on the matter. [28119/22]
Amharc ar fhreagraSignificant steps are being taken to support families with the costs of early learning and childcare.
The National Childcare Scheme (NCS) is currently supporting thousands of families to offset these costs. A recent review of the NCS showed that:
38% of families reported that half or more of their early learning and childcare costs were covered by the NCS;
56% reported that they had more money to spend; and
28% reported that they were working more (with 8% reporting they would not be in work without the NCS).
I recognise however that the burden on some families remains high and we need to do more to ensure affordability.
The recommendations of an Expert Group to develop a new funding model for early learning and childcare were adopted by Government in December. This new funding model marks a new departure in State funding of the sector and is a significant step towards ensuring high-quality, affordable, sustainable and accessible services.
An essential and top priority for the Funding Model Expert Group was to make recommendations for a mechanism to control fee rates for different types of provision for early learning and childcare.
There are four specific recommendations on fee management, including the introduction of a fee freeze in the first instance, improvements to price comparability, and developments to the fee management system further to the assessment of cost data.
Fee management will start with a requirement of providers not to increase fees on September 2021 levels. The fee management system will be further developed in subsequent years, informed by income and cost data analysis.
The Expert Group made a further three specific recommendations on affordability, including amendments to the NCS and further development of subsidies linked to household income and expenditure or other criteria.
The Expert Group report informed the transformative package of measures for the sector committed to in Budget 2022, including the new €221 million Core Funding stream. Core Funding will operate from September 2022 to support improved quality, affordability, and sustainability.
Core Funding will have a contractual requirement that fees between September 2022 and August 2023 are not greater than September 2021 levels. This feature of the scheme will ensure that parents feel the full affordability benefits of the NCS and the Early Childhood Care and Education (ECCE) programme.
Significant investment is being made by my Department to address affordability for parents through the National Childcare Scheme (NCS). I announced a number of changes to the Scheme as part of Budget 2022. These changes will be of significant benefit to many parents.
For instance, from 2 May, the NCS no longer deducts hours spent in pre-school, or school, from NCS awards. This means that parents may use their full awarded subsidised NCS hours – benefitting an estimated 5,000 children from low income families.
In September 2022, the NCS Universal subsidy will be extended to all children under 15 years of age – benefitting up to 40,000 children.
Both of these changes will result in more parents getting additional subsidised hours for early learning and childcare.
Since the start of the pandemic, my Department has ensured the sustainability of services and prevented the additional costs from public health measures being passed on to parents. ELC and SAC employers continued to benefit from the exemption to the turnover rule for the Employment Wage Subsidy Scheme (EWSS) until April 2022.
In advance of the introduction of Core Funding, a Transition Fund is available to providers, contingent on an agreement not to increase fees from September 2021 levels. This fund will operate from the end of the Employment Wage Subsidy Scheme until the introduction of Core Funding (May-August 2022).
So far 93% of services have signed up to the Transition Fund. I am delighted that in return for this investment, the vast majority of parents will benefit from the operation of a fee freeze. Parents should feel confident and reassured knowing that in services participating in the Transition Fund, their ELC and SAC fees will not increase. This is the beginning of fee management that will now make it possible for substantial future investment to reduce parental fees over time.
Government has approved the recommendations of the Expert Group. Core Funding and the changes to NCS introduced in Budget 2022 begin the implementation of many of these wide ranging recommendations. Implementation will be further progressed in the coming years as additional funding is secured through the annual Estimates process.
The fee management system, in tandem with developments to the NCS will together deliver improved affordability for families.
