Marian Harkin (Sligo-Leitrim, Independent) | Oireachtas source

I move:

That Dáil Éireann: notes that:

- quality, accessible and affordable childcare and nursing home services are an indispensable part of the fabric of any well-functioning society, and these services support individuals and families at different stages of their lives, but most especially at both ends of life when they are in greater need of care;

- services like childcare and nursing home care are mandated by the State to operate with a certain ratio of staff to each individual accessing the service, and this has led to a situation where there is a steadily increasing cost base while incomes are not keeping pace;

- the trend towards the closure of smaller local childcare services and smaller nursing homes, which are often family run, leads to significant difficulties for individuals and families in accessing essential services locally, and also leads to regional inequalities in the supply of these services;

further notes that, in the case of the childcare sector:

- Tusla (the Child and Family Agency) data shows that 106 Early Learning and Care services closed between January and August 2021, a total of 113 closed during the same period in 2022, and 86 closed during the same period in 2023, representing an average of just over 100 closures per year and the vast majority of these closures were in small- and medium-sized services;

- the introduction of core funding combined with the high level of inflation and the freezing of fees has resulted in many service providers coming under severe financial strain;

- this situation has been exacerbated by the fact that new entrants to the market, often larger providers, do not have to comply with any cap on fees and can still avail of the same level of core funding as established providers, which leads to an anti-competitive business environment;

- the introduction of the Core Funding Chart of Accounts (CFCA) financial reporting requirement has placed a heavy and unnecessary administrative burden on managers and providers, and it has also placed a severe financial burden particularly on smaller providers whose profit margins are unable to sustain the significant extra costs involved;

also notes that, in the case of nursing homes:

- if the Health Service Executive (HSE) forecast for capacity requirements for 2031 is to be met, a further 11,000 beds are required in the sector, and yet, despite these forecast capacity requirements the spend on the Fair Deal Scheme as a proportion of overall health expenditure has steadily declined over the last decade;

- the Economic and Social Research Institute (ESRI) report entitled "Long-term Residential Care in Ireland: Developments since the onset of the Covid-19 Pandemic", published in January 2024, confirms that independently owned and operated nursing homes, many of which were family run businesses, and which until recently dominated the sector, now only supply 35 per cent of beds;

- there has been a marked shift towards a consolidation of nursing homes under larger operator groups, many of whom are recent entrants to the Irish market and some of whom are financed by international private equity;

- the same ESRI report identifies large differences in the Fair Deal Scheme funding across public and voluntary or private nursing homes, with the average price for a Fair Deal funded bed in public nursing homes being 55 per cent higher than in voluntary or private nursing homes, and this puts many private, voluntary and not-for-profit providers under severe financial pressure; and

- the ESRI identifies regional inequalities in nursing home supply and according to their research, which is based upon future planned development, these inequalities are likely to be exacerbated in the near term;

calls on the Government to put in place specific policies to ensure that in both the childcare and nursing home sectors, there will be an equitable local and regional spread of affordable quality services;

in the case of childcare services, calls on the Government to:

- increase core funding rates in line with inflation;

- ensure that the fee freeze for all childcare services remaining at historical levels must be reviewed, so that there is a level playing field between new and existing childcare services in regard to the capping of fees;

- accept the accounts that are prepared, submitted and accepted by Revenue, and not to insist on a second set of accounts under CFCA, which is proving very costly in terms of time and accounting fees, thus pushing many childcare providers over the brink;

- increase the rate of Early Childhood Care and Education funding from €69 to €100; and

- index link funding in future budgets to provide for increases to allow for new employment regulation orders for staff each year, additional staff cover due to required ratios, increased sick leave, and pension auto enrolment; and

in the case of nursing homes, further calls on the Government to:

- put in place an immediate "stabilisation fund" of €265 million to sustain local nursing home services and to stabilise the sector;

- reform Fair Deal pricing so that Fair Deal rates are based on resource allocation that reflects individual residents' care needs;

- guarantee the sustainability of the sector by ensuring a balance between the financial viability of providers, compliance with regulations covering health and social care needs, and the strategic planning of supply to meet demand across the entire country; and

- ensure equity of access to the provision of services including physiotherapy, speech and language therapy, occupational therapy and equity of access to aids and appliances for all older people, regardless of whether they are in a public, private or voluntary nursing home.

On behalf of myself and my co-signatory, Deputy McNamara, I thank the Ceann Comhairle for the opportunity to introduce this motion. In it, what I have tried to evaluate are the challenges facing two vital sectors, namely, childcare and nursing home care. I decided to group the two together because quality, accessible and affordable childcare and nursing home care are indispensable parts of the fabric of any well-functioning society. These services support individuals at both ends of their lives through either early education and care or end-of-life care. They also support families in managing care and support our societal model as we live our everyday lives. As such, they are crucial to the wellbeing and functioning of our communities.

Another important aspect of these care services is that the State plays a significant role in funding them and laying down rules, regulations, requirements, quality standards, etc. That is exactly as it should be. However, putting in place new and appropriate extra requirements, for example, a better ratio of adults to children in a childcare setting or a similar extra requirement in a nursing home, means that the additional costs have to be factored into State support levels. If they are not, the cost base increases and incomes do not, which can lead to trading difficulties and closures. I wish to make it clear that I support extra safety and quality requirements, but we have to recognise that they must be paid for.

I also grouped these two sectors because of the trend in both closures of small, medium-sized and often family-run providers. This has two outcomes. First, the loss of services locally and regionally leads to local and regional imbalances in the provision of such services, local job losses and a loss to local economies. While some other services do open, it tends to be in larger towns and cities, meaning services are no longer accessible locally. Second, large multinational providers gain larger slices of the markets. This has its own implications. If we want to see what some of those are, all we have to do is look across the water to our neighbours in the UK and the US. In an overall sense, I see a trend in Government policy in these two crucial sectors towards overseeing the closure of more smaller services, often being run by one, two or three family members, in urban and rural areas and their replacement by larger companies. Those are often multinational companies and are almost always located in urban areas, causing regional and local imbalances in accessing these vital services. My father and late husband each opened and ran small businesses. Many of my siblings are self-employed as well. Maybe that is why I have respect for people who run small businesses. For them and, crucially, the communities their businesses serve and the locals who rely on their services, I do not want to see any Government policy or set of policies contributing to the closure of their businesses.

That is the overall thrust of this motion, but I wish to discuss some specifics, starting with childcare. Just today, the Federation of Early Childhood Providers, with a membership of more than 1,400 early years services, published a compilation of hundreds of letters from frustrated, hugely disappointed and extremely annoyed childcare providers. There were 300 letters from a total of 500 received. Their message is straightforward, that being, their sector is teetering on the brink of collapse. This report with its book of letters, entitled “United We Stand”, will be presented to the media, Government officials and the Department of children this week in a unified plea from a sector that says it is at breaking point.

A few remarks in the report paint a grim picture. According to it, women comprise 98% of the sector and it is soul destroying to see so many women being pushed out of business and, crucially, so many parents scrambling for services. Women and men will have to leave the workforce because of a lack of childcare. The report states that childcare providers feel bullied, which is a word that comes up repeatedly. They complain of being over-regulated, answerable to multiple agencies that do not communicate effectively, and constrained by financial pressures that compromise the quality of care. According to the report, there is insufficient funding, particularly for State programmes like ECCE, which is the early childhood care and education system. The providers say this is threatening the viability of their services.

What do they say are the main challenges leading to the closure of so many smaller services? Twenty-eight have announced their closure in the past two weeks alone. That is on top of 130 independent childcare provider closures in the year since March 2023. A few weeks ago, I attended a meeting in the village of Coolaney in my county. Approximately 1,000 people already live there and many families are moving there. At the meeting, I learned that two of its three childcare providers would be closing this summer. Many others across the county and in neighbouring County Leitrim told me that they were at the end of their tether, dispirited, despondent and disappointed. That is not an exaggeration. Concern was raised that seven services, or 10% of the services in Sligo, would be closing this summer.

Why is this happening and what can we do? While there are a number of serious concerns, I have raised just two in this motion, the first of which is the core funding model, which was introduced in 2022. At the time, providers were asked to freeze their fees in order to access core funding. They were asked to do the right thing by parents because the Government said it supported them during Covid. They did that. The majority of providers have not had a fee increase for several years, with Covid being one of the reasons, but they took the request at face value and froze their fees at 2017, 2018 or 2019 levels. Fast-forward to 2024 and costs, including staff costs - rightly so - and inflation have increased significantly, but there has been no increase in core funding. The issue is not that simple, though.

Those who did the right thing have had their fees frozen at 2017 or 2018 levels but any new groups that are opening, which tend to be larger chains that are moving into the market, can access the same level of core funding per child as a smaller provider but can charge higher fees. This is essentially wrong and anti-competitive and in many cases, it is squeezing out the smaller providers and, of course, those providers that did the right thing in the first place.

The other issue is the requirement for their accounts to be signed off by a chartered accountant. Pobal will not accept a set of accounts that Revenue will accept. Is this bureaucracy gone mad? I always thought that there was no higher power than Revenue except, perhaps, God. The Department of children and Pobal are on a higher level, however, and will not accept accounts that are acceptable to Revenue. This is bureaucratic madness with two sets of accounts for what often are very small businesses. One might have ten or 15 children in a service but yet, the accounts have two different timelines. One set of accounts is for Revenue from December to December and the other, for the Department, has to be September to August. There is huge paperwork involved in doing these accounts twice. Moreover, the huge cost of paying an accountant to satisfy the Department's requirements is definitely driving businesses to the brink and is closing some of them down. I have only given the Minister of State a short synopsis of the challenges facing the sector but were they to be sorted, I do not believe it is rocket science to do so, we would have a different situation.

I see childcare like a three-legged stool. Yes, fees have been cut to help parents. More is needed but it is good progress. Wages have been increased and again. more is needed but it is good progress. The third leg of the stool, however, is the providers. They must be able to provide a service and make a living and that is the leg of the stool which is broken.

My proposals are to increase core funding in line with inflation to ensure a level playing field for new and existing services on the fees they can charge, to increase the rate of early childhood care and education funding from €69 to €100, to drop the bureaucratic and hugely expensive madness of requiring two separate sets of accounts and to ask the Department to accept the accounts that Revenue accept.

I now will turn to some of the challenges being faced in the nursing home sector. First, let me say that I have no issue with the amendment tabled by the Social Democrats on ending the HSE recruitment freeze when it comes to home carers and nursing home health assistants, as well as on the provision of a statutory right to home care. That is what we all want for ourselves and our loved ones. We want to live in our own homes as long as possible but we also know that that will not always happen. The HSE itself has forecast that if capacity requirements are to be met by 2031, a further 11,000 beds will be required in the sector. It is it is crucial that we ensure that those beds are available for those who need them where they need them.

Another important point to note is that despite those forecast capacity requirements, spending on the fair deal as a proportion of overall health expenditure has steadily declined over the last decade. Expenditure is not even keeping pace with spending in other parts of the health sector and that tells its own story.

In this motion, I am largely relying on the ESRI's 2024 report entitled, Long-term residential care in Ireland: Developments since the onset of the COVID-19 pandemic, for my statistics and figures because those are independent and verified.

What does the ESRI say? It confirms that independently owned and operated nursing homes, many of which were family-run businesses and which until recently dominated the sector, now only supply 35% of beds. That tells its own story. It also states there has been a marked shift towards a consolidation of nursing homes under larger operator groups, many of which are recent entrants to the Irish market and some of which are financed by international private equity. That is a significant issue. Because of that, the report says that the ESRI identifies regional inequalities in nursing home supply and according to its research, which is based upon future planned development, these inequalities are likely to be exacerbated in the near future.

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