Alan Farrell (Dublin Fingal, Fine Gael)
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Apologies have been received from Deputies Rabbitte and Sherlock. I welcome members and also viewers who may be watching the proceedings of this public session of the Select Committee on Children and Youth Affairs on Oireachtas TV. On 21 November 2018, the Dáil ordered that the Supplementary Estimates for Public Services in respect of Vote 40 - Children and Youth Affairs - be referred to this committee for consideration. The purpose of this meeting is to consider the Supplementary Estimate and report back to the Dáil. The select committee is required to report back to the Dáil not later than 12 December 2018.

On behalf of the select committee, I welcome , Minister for Children and Youth Affairs, Deputy Katherine Zappone, who is accompanied by her officials, Dr. Fergal Lynch, Secretary General, Mr. Dermot Ryan, assistant secretary, Ms Bernie McNally, assistant secretary, and Mr. Gerard Hughes, principal officer, Department of Children and Youth Affairs. I thank them for their briefing material.

The proposed format of the meeting is that we will deal with Vote 40 and the Supplementary Estimate, which relates to subhead B4 - general childcare programmes. At the outset of the consideration of the Estimates, the Minister can give an overview of the programme and the requirement for the Supplementary Estimate. We will then open the floor to members of the committee.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him, her or it identifiable. I remind members to please turn off their mobile phones as they can interfere with the broadcasting system and reporting of our meeting.

Members have received a briefing document on the Supplementary Estimate. I invite the Minister to make her opening statement.

Katherine Zappone (Dublin South West, Independent)
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I thank the committee for making time available to consider the Supplementary Estimate for the Vote of the Department of Children and Youth Affairs. This Supplementary Estimate is required in respect of subhead B4, the general childcare programmes. This subhead provides funding to subsidise the childcare costs of low and middle-income parents and those accessing education and training programmes.

An additional €47.33 million is required in order to meet additional demand by parents for subsidised childcare as a direct result of this Government’s commitment to assisting parents to access affordable and quality childcare. This commitment led to what is now called the September measures.We have seen significant additional demand for childcare places as a result. I will revert to these measures in a few moments.

It is projected that there will be an underspend of at least €27 million across other areas of the Department's Vote. This includes €15 million in once-off savings arising from changes made to the early childhood care and education, ECCE, payment calendar. This reduces the net additional Exchequer funding requirement to €23 million. That is the figure we are talking about today.

I will expand now on the reasons that the additional Exchequer funding for childcare is required this year. The general childcare programme provides funding for the community childcare subvention, the training and employment childcare schemes, the learner fund, funding for county childcare committees and national voluntary childcare organisations, and the Síolta and Aistear supports. In addition, it provides for capital funding for the early years and school age capital programmes. Another important element of this subhead is the provision for development costs associated with the introduction of the affordable childcare scheme in 2019.

The community childcare subvention programme is demand-led. There has been a notable increase in demand following an extensive communications and media campaign to inform parents and providers of improvements to the scheme in advance of the introduction of the new affordable childcare scheme later in 2019. These improvements were introduced in 2017 and included the introduction of a universal payment and an increase in subsidy rates across the different strands of the community childcare subvention and the training and employment childcare schemes.

These changes represent a major step towards accessible affordable quality childcare following decades of underinvestment in our childcare and early years sector. Ireland is reported to be the most expensive country in the Organisation for Economic Co-operation and Development, OECD, for childcare for lone parents and the second most expensive for couples. According to OECD research in 2016, Ireland spends just 0.5% of gross domestic product on early learning and care and education, including expenditure on under six year olds in primary school, as opposed to an OECD average of 0.7%.

The September measuresinclude, first, a new, non-means tested universal subsidy available for all children aged between six months and three years of age or until they qualify for ECCE in registered childcare. This amounts to as much as €20 a week or €1,040 per year for children in full-time childcare. Second, there are enhanced supports of up to €7,500 per eligible child per year to assist families to return to employment and-or training and education. These changes have been highly successful in bringing subsidised childcare supports to the parents of some 13,000 more children than originally provided for in budget 2018. This accounts for €29 million of the additional funding required in 2018. In addition, there has been a noticeable change to the mix or composition of the qualifying rates parents are entitled to with more parents qualifying for the higher band A rate. We have seen an increase in parents availing of longer hours for childcare. This accounts for some €19 million of the additional funding required.

These initiatives are leading to positive change for parents and children and when measured in tandem with other childcare initiatives, such as the second year of ECCE and the introduction of the affordable childcare scheme in November 2019, should see some improvement in Ireland’s position when measured against the OECD average. The remaining portion of the required Supplementary Estimate is of a technical nature. The reduced intake of receipts into the Department's Vote is to be offset against a corresponding reduction in expenditure on subhead B8 relating to the intervention programme for children and subhead B9 relating to the Programme for Peace and Reconciliation.

In conclusion, I commend the Supplementary Estimate for the Department of Children and Youth Affairs Vote to the committee and I am happy to address any questions members may wish to pose.

Alan Farrell (Dublin Fingal, Fine Gael)
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The Minister will not be surprised to hear that I have no criticisms of additional funding being required in the Department. This is a demand-led service and I am heartened that 13,000 more than expected availed of these measures. That is welcome.

I have a small number of queries. The Minister has outlined on numerous occasions the stark level of underinvestment for decades in the State. A number of schemes are due to come to fruition in 2019 and 2020 which will require additional budgets. Regarding the 0.5% of GDP and the target of more than 1%, will the Minister outline her long-term strategy to get us closer to the OECD average and to ensure we can meet the demands of expectant parents or couples who might be thinking about parenthood given that this will be of benefit to them in the future?

Katherine Zappone (Dublin South West, Independent)
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I thank the Chairman for the positive comments on progress to date. The Tánaiste and Minister for Foreign Affairs and Trade was questioned about some of these issues today in the House and he said that we are on an incremental path of increasing the investment and trying to move towards that target. Incremental does not necessarily mean slow. We have done some things quite rapidly in the past three or four years in terms of increasing investment by over 117%. That is my first point.

Second, to move from 0.5% of GDP to the OECD average of 0.7% will require a significant amount of extra investment. In increasing it rather rapidly in the last couple of years my practice has been to outline a rationale for the importance of finding additional money to prioritise the development of the infrastructure for childcare. In the last budget, the arguments I made largely surrounded not only the importance of this type of support for children in terms of their early learning and care and the developmental aspects of that but also the fact that we need more investment to support parents who wish to return to education and training. Many of them are inhibited from doing that due to the fact that it still costs too much for them to feel that they are going to receive additional benefits for doing it. Part of what we are trying to do is identify Estimates for each year where if we increase by X% it will be enough to include some of the people who are trying to make a decision to go back to work, and within enough time to plan for that, and ensure that it will make enough of a difference for them to do that. Taking this approach and spending in this way will not necessarily overheat the economy because we are increasing our productive capacity. Those are some of the arguments I made in respect of the last budget.

As the committee is aware, we recently launched the national early years strategy for the next ten years, entitled "First 5". In that strategy we identify not only the vision for how we wish to increase investment but also the rationale for the approaches we are taking to get much closer to the OECD target. The affordable childcare scheme is the main tool for that. We must continue to increase the subsidies per child per week depending on the type of care the child requires. We are also committed to increasing thresholds. When one identifies a certain percentage of increases that one wishes to make for families in terms of incomes and so forth, working back from that helps to determine the type of threshold that would be required to increase living standards for families in a significant way. With regard to that aspect of the question, we do not simply say we are going to try to reach 0.01%, for example, of an increase next year but instead we examine and try to calculate what we require to have a meaningful increase in the living standards of families according to the type of family involved. That is the main aspect of trying to calculate the figures, and I have many of the people who do that well with me today.

There is another aspect to the increase in investment. It is important to talk about the average percentage increase that is required to build the childcare infrastructure but if we always average the amounts we do not necessarily take account of the ways in which people are impacted differently because of the differential in their family income. Therefore we will also be seeking to get enough money to pay more into a new model that we want to develop for early learning and care, which we call the DEIS-type model, where we make more investment in arenas which require it more. Again, this is to assist levelling the playing field for our children.

I am not talking about percentages per sebut the rationale which I hope will persuade Government to prioritise even more significantly than it has done in the past. This is about the development of a new funding model for the early learning and care services in which more is invested in more settings and where higher quality can be delivered, at the same time as ensuring modest fees for families and better pay and working conditions for staff.

Alan Farrell (Dublin Fingal, Fine Gael)
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The Department has been good at advertising some of the new schemes, using bright and eye-catching colours. Is the Department spending enough on advertising the schemes, notwithstanding the fact that 12,800 additional children are participating? We can never do enough to promote the uptake of these schemes.

Katherine Zappone (Dublin South West, Independent)
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One of the reasons we need additional money in the form of a Supplementary Estimate is that our information campaign for the September measures increased demand more significantly than was anticipated. It is not an exact science. As we move to the introduction of the affordable childcare scheme towards the end of 2019, demand will increase again and move us to a new level of spending. As for whether we will have sufficient budgets, it is not just about the money; it is about when we begin the campaign. Following feedback from the Chairman and other Deputies and officials with whom I have discussed this, we think we should start it sooner than we originally anticipated and that will cost a little more.

Alan Farrell (Dublin Fingal, Fine Gael)
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Significant savings have been made in the youth capital scheme, under subhead B6 - youth services, with €1.665 million saved. There have been time-related savings for certain projects where demand was less than anticipated. When capital moneys are not expended I take an interest, as I did when it happened in the Department of Education and Skills in the past. The infrastructure to be delivered by these projects across the country is critical. I would prefer an overspend to an underspend.

Katherine Zappone (Dublin South West, Independent)
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I accept what the Chairman is saying on that issue. It is important that a certain amount of capital is available for the youth sector. One has to plan ahead to spend capital but it would be good to review the way we communicate what is available and what types of scheme people can apply for, so that it is done in plenty of time. The capital underspend in the current year was due to a low uptake, though this may have something to do with the time required for planning and the process people have to go through to identify schemes and the amounts for which they can apply, as well as the fact that they have to obtain their own additional funds. The amount for youth funding for 2019 will be available again and will not reduce on account of the savings for 2018.

Alan Farrell (Dublin Fingal, Fine Gael)
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Has the Minister had the opportunity to review the committee's report on childhood obesity?

Katherine Zappone (Dublin South West, Independent)
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I have not.

Alan Farrell (Dublin Fingal, Fine Gael)
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It contains a recommendation on the subject of school meals, something the Department of Employment Affairs and Social Protection is working on. Following the publication of the report, the early childhood sector stated that there was a need for guidelines, or some direction from the Department, over the food types being offered to children in ECCE schemes and other supported community childcare schemes across the country. Has the Department considered doing this now or in the future?

Katherine Zappone (Dublin South West, Independent)
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Yes. My understanding is that one of our officials, Dr. Anne Marie Brooks, contributed to the policy of the Department of Health in this area and the First 5 strategy has a commitment to guidelines for early learning and care settings. The guidelines which the Chairman suggested are integral to our thinking and they are on our radar.

Alan Farrell (Dublin Fingal, Fine Gael)
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Can the Minister envisage this being introduced in the future?

Katherine Zappone (Dublin South West, Independent)
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Yes, I think so. In light of the Chairman's question, I will take a look at the suggestion.

Alan Farrell (Dublin Fingal, Fine Gael)
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It is important, given the effects unhealthy eating at an early age can have on a child's progression. Has the Minister any closing remarks?

Katherine Zappone (Dublin South West, Independent)
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This is the first year since 2014 that we have not had a balanced budget and I have been pleased with the way the moneys have been managed since I took over. The spending of these moneys is demand-led and all the available research suggests there is always fluidity in this scenario. Even with that, however, the Department has done an excellent job. The fact that demand in 2018 has been greater is a positive and yet we have still managed to make savings across the entire Vote, without them having to be forced upon us.

Many of them are significantly time-related. That demonstrates strong fiscal management of the budget.

Alan Farrell (Dublin Fingal, Fine Gael)
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On behalf of the committee, I thank the Minister and her officials for their attendance this afternoon. We have now completed our consideration of the Supplementary Estimate for Vote 40.