Katherine Zappone (Dublin South West, Independent) | Oireachtas source

I do not anticipate widespread increases in child care fees as a result of increases in subsidies this September. There is no evidence of plans to increase fee levels. Fees charged to parents are at the discretion of child care providers, who operate independently of the State. There are many factors that influence the fees charged, including a range of cost pressures and market forces. There are many reasons why a child care provider may raise its fees, in particular if child care fees have changed very little in recent years. While I do not expect a widespread increase in fees, my Department will actively monitor the trends over time.

The policy paper on the affordable childcare scheme, ACS, which the Government approved last October examined the option of imposing price caps on child care providers to prevent the erosion of subsidies through fee inflation. The policy paper noted that among the potential benefits of price caps would be preventing fee inflation and providing certainty for and equity between parents. However, it also noted problems that might arise. The introduction of price caps would represent economic regulation of the market. That would raise legal and economic questions as to what constitutes a fair price for child care. The policy paper recommended that there should be no initial price cap but the option of price caps should be considered following the independent review of costs and an examination of the initial market response to higher subsidies. The independent review to be commissioned later this year will include an examination of variation in costs and fees. It will be a key input into any future consideration of the potential benefits and risks of introducing price caps.

Estimates of take-up of the September 2017 measures suggest that up to 70,000 children will benefit from the improvements I am making. The fact that so many children will benefit from subsidies this September is a very positive development and represents a significant precursor to the affordable child care scheme when even more families will benefit. I am hopeful that the Bill on the affordable child care scheme will be published before the summer recess. I cannot guarantee this but we are working very hard to make this a reality before mid-July.

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