Ms Avril McMonagle:

It is a pleasure to bring this report on child care supports for working families to the committee on behalf of Donegal County Childcare Committee. I thank the Chairman and the committee for the invitation to share the main findings of the report. I will outline the rationale behind our work and what we hope to achieve. Following this, Mr. Alan Gray, from Indecon International Economic Consultancy Group, will take members through a summary of the economic analysis and key proposals.

Early last year, we set about commissioning this research as an independent examination of whether the cost of child care represents a barrier to families with young children to take up, or to remain in, employment. A noteworthy feature of current child care funding policy is the absence of any child care support for low-income working families who do not avail of the community child care subvention scheme. As part of our work in Donegal County Childcare Committee, we frequently speak to parents who, on having their second child, are forced to leave work if their income is marginally above the band for the family income supplement. As demonstrated in the report, an annual cost of full-time child care for two children of €16,500 is simply inaccessible for a high percentage of working families.

The consequence is that mothers, and it usually is mothers, then join the statistics of the unemployed with child dependents mentioned in the report. It has been shown that these people will be more likely to remain unemployed and will have a lower probability of exiting the live register. In this sense, the cost of child care reinforces Ireland’s especially poor record of consistent long-term unemployment. Child care in Ireland is the second most expensive in OECD countries but we have known this for quite some time. This was the key driver of undertaking this work. Despite almost universal agreement on the issue and many reports on what quality child care should look like, until now, a formal analysis or support proposal on the affordability of child care has not been forthcoming.

In developing the research proposal for this work early last year, we did not want to set this only in the context of the cost of child care. We are aware that child care is a labour intensive service because of adult-child ratios.

When developing the research proposal for this work early last year, we were interested in setting it in the context, not so much of the cost of child care, but of parents' ability to afford child care against average earnings and to suggest realistic solutions to this long-standing problem. We are pleased that this report does exactly that. The report proposes a number of policy initiatives to reduce barriers to employment and, as a result of a detailed cost-benefit analysis, positive economic benefits are demonstrated.

Access to quality, affordable child care has major positive impacts on a child’s future educational and life chances. This is, by now, a well-accepted argument. As we continue to strive towards this important objective, which as locally-based city and county child care committees we do on a practical and realistic level in our work every day, there is a real danger that we will set far too high an expectation of what centre-based child care can realistically achieve in isolation from other contributing factors.

We need to be highly cognisant of connecting factors in the child’s life - the critical importance of the family environment – welfare dependency, mental health issues and child poverty. The preschool year is a relatively small, albeit important, part of the influences which have been experienced by the child in that year, much less in the child’s entire life. The forthcoming evaluation of the national early years access initiative will be very useful in our understanding of this area. Unless we are able to see both quality child care and family support as inseparable, success may prove much too tall an order for either in isolation.

It would be fair to acknowledge that significant public expenditure is incurred annually to support child care arrangements; many positive advances have been made in recent years and we are definitely moving in the right direction in the midst of a very difficult financial climate. Therefore, at this time, outside the universal free preschool year, it is essential that such limited expenditure is targeted on those most in need and as a mechanism that will enable parents to take up employment as the economy improves.

Of those that stated child care arrangements had prevented them from looking for a job, over 56% were in the lowest income groups. Thus, the research finds that child care costs disproportionately affect low-income families in looking for employment. These statistics represent a huge portion of our society now and simply cannot be ignored.

Currently, the only measurable quality indicators in place are the Child Care (Pre-School Services) Regulations and the standards therein. In keeping with this, we have proposed that only child care providers registered with the Child and Family Agency should be able to avail of these proposals.

We have also built in a number of measures that ultimately improve the quality of service to children and families. The first is requiring that all child care service providers must be tax compliant, which is primarily aimed at bringing non-regulated paid childminders into the regulated system. By bringing non-regulated childminders under the State’s regulation framework, not only is the size of the shadow economy reduced in this area, child protection measures and a more standardised quality of service to children are provided.

Second, by proposing that we open the current community child care subvention programme to all child care service providers we would eliminate the two-tier system currently in operation. This is where children of low-income families have to access community child care services to avail of subvented rates, leading to the segregation of children into one service type. In addition, accessibility to community child care services and therefore subvented rates is largely dependent on where one lives. For example, Letterkenny, with a population of over 20,000 people, is served by one community full day-care service. One does not have to do the sums to realise that for a low-income family living in Letterkenny the chances of getting subvented child care are nil.

In summary, quality early childhood care and education will enable children to achieve their life and educational potential and reduce the need for later interventions. However, whether we like it or not, child care is also fundamental to economic policy and is a service that underpins economic development and growth. With the development of appropriate, timely and responsive child care policy, we believe both objectives can be achieved without one necessarily compromising the other.

In the forthcoming national early years strategy, we will have a clear plan to progressively raise quality standards and increase investment in child care. To complement this, we have brought here today a fully-costed proposal that offers viable alternatives to barriers to remaining in, or taking up employment, as a result of the cost of child care. We hope the report will inform change in child care funding policy by highlighting where potential adjustments are required to current State-funded child care supports. By concentrating limited Exchequer funding on those with the greatest need, a long-established cycle of unemployment and deprivation could be broken. That would represent a major social achievement for us all.

I hand over to Mr. Alan Grey who will give a summary of the research findings and proposals.