Ms Marian Quinn:

I thank the committee for its invitation to discuss the issues facing the early childhood sector. When announcing his budget in September 2022, the Minister for Children, Equality, Disability, Integration and Youth, Deputy O'Gorman, stated that the Government had met its target of a €1 billion investment by 2028. While the increased investment is welcome, it must be acknowledged that this is still only an investment of 0.3% of GDP in our early years sector as opposed to the average investment of 0.8% across Europe and the 1% recommended by UNICEF. This, combined with significant inflation, means that, despite increased investment, the core issues of the staffing crisis, financial instability and variable quality remain.

A competent early years system is necessary for all stakeholders. Our economy requires a childcare system that enables primary caregivers to be in employment. Families require affordable and accessible provision. Children, when attending early years services, require high-quality interactions and consistent relationships with educators who can be in the moment with children. Service providers and educators require appropriate remuneration for their work. While provision is becoming more affordable for families, this is perhaps the only target that is actually being met.

Currently, many small-to-medium providers are experiencing financial pressures due to Government policy. In 2022, we saw the introduction of core funding, which many would see as a fair, well-balanced and well-intentioned funding model. However, the funding rates were set prior to the unprecedented inflation rates that beset the country. Providers signing up to core funding were obliged to commit to a fee freeze, with the target year being set as 2021. During the height of the pandemic, providers received supports through the employment wage subsidy scheme, EWSS, and were rightly asked to enter a voluntary fee freeze by the Department of Children, Equality, Disability, Integration and Youth. As a result, providers who complied with this request now find themselves with their fees frozen at 2017 or 2018 rates while services that raised their fees are significantly more viable. The Department has refused to allow reconciliation for those whose fee structures predated the target year of 2021. This, coupled with the significant inflation rates, has left many providers in a precarious financial position. Additional investment was announced in budget 2024, but this will not be available until September, thereby requiring providers to make tough decisions regarding the operational model they offer.

The recruitment and retention of educators continues to be a major issue in the early years sector. While the historical employment regulation order, ERO, introduced pay rates for various grades of educator, these rates have not kept pace with inflation and, while welcome, were recognised as a first step towards the professional rates required to attract and retain a highly qualified and experienced workforce.

Many employers hoped that an improved ERO would be made this year and that additional funding would be invested to meet this. However, this has not happened and while the educators really need this pay increase, many employers are dreading it as it will further challenge their viability. Poor wages, lack of paid non-contact time, increased paperwork, increased parental expectations, children with complex needs, and so on, all contribute to significant difficulties in recruitment and retention within the profession.

Budget 2024 saw increased investment in the access and inclusion model. This was welcomed as a necessity for supporting inclusion, but many recognise that supports under level seven of the model will not be achievable as there are insufficient numbers of educators willing to remain in the profession to fill places and capacity will be reduced if providers reduce ratios by reducing intake of children. The impact of the recruitment crisis is not only being felt by providers but by parents all over Ireland who are finding it increasingly difficult to find childcare for their children, while endeavouring to enter the workforce. This is most strongly felt by parents of children under two.

With the announcement of further increases in the national childcare scheme, NCS, subsidies to parents, the Department of Children, Equality, Disability, Integration and Youth expressed an anticipation of an increase in demand coinciding with the increased subsidy. We recognise that capital funding is to be made available to increase capacity, which is great. However, we are in a staffing crisis so this increased capacity cannot be actualised without addressing recruitment and retention.

The Minister referred to the fact that parents can access the NCS through registered childminders. Unfortunately, to date very few childminders have registered. When they look at the experiences of their colleagues in centre-based provision, they will be very cautious about engaging with Government schemes and the myriad of conditions and administration required. The NCS is also problematic for service providers and families with regard to the restrictions and rules imposed.

The delay in implementing required supports for children from disadvantaged and marginalised families and communities is disturbing. The €4.5 million announced for September 24 is insufficient to even make a dent in terms of the supports required. If substantial investment is made in the equal participation model in next year's budget, it is likely it will be September 2025 before significant supports will be in place.

There is concern about services risk rating families and prioritising safe families who are likely to comply with the rules and are able pay increased fees where funding is reduced or removed due to rule requirements. We also need to be careful of the corporatisation of early years, where significant portions of money invested to provide high quality early years and school age childcare is actually diverted into the pockets of shareholders through international pension funds and so on. We have asked for many years that inspections be streamlined and made to be more manageable for a service. We agree with the need for inspections but find it difficult to work with many different agencies, some with conflicting requirements and findings. This is undoubtedly a reason for some of the exodus from the profession.

We take this opportunity to highlight the fact that early years services are subject to Department of Education inspections, yet we had the word "education" stripped from our title with zero consultation and are required to pay rates, despite being defined in law as educational facilities, which should be exempt from rates.

I thank members for listening. We welcome any questions they may have.