Kathleen Lynch (Cork North Central, Labour)
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I would like to share time with Deputy Ciarán Lynch.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Is that agreed? Agreed.

Kathleen Lynch (Cork North Central, Labour)
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Anyone who has reared children should not need a "heads-up" on this issue. The NCIP community child care subvention scheme which was in place from 2000 to 2007 had a capital programme element but also provided a grant for every qualifying child. There was some talk about this around two years ago, when the then Minister for Justice, Equality and Law Reform, former Deputy Michael McDowell — I can never understand why the scheme was administered by that Department — decided to change the conditions under which people qualified. There was such an uproar that those plans were dropped.

From January 2008 we will have a new scheme which will be in place for two years until 2010 but it will be so narrow in its focus that it will ensure women and men — there are some single parents who are men — will need to rely on social welfare or will be forced to take their children out of child care. One will have to be in receipt of social welfare or family income supplement before one will be able to get this grant for child care. That leaves an entire group of people outside the remit of this scheme. There will be those who can afford to pay, and the middle group of people who are just about surviving and whose children can receive child care with this subsidy. On the other hand there will be children whose parents are in receipt of social welfare and, therefore, fall within the scheme.

We all know that for children to grow up into worthwhile adult members of society there must be a combination of all of the sectors in society and they need to contact people in other strands of society. We have seen child care schemes which have enabled women to participate in society by returning to education or even part-time work.

However, from January we will have a system whereby people who can afford to put their children into child care will continue to do so, while on the other side of the fence there will be people who will qualify because they are in receipt of social welfare. That is not what child care is all about and it is most definitely not the intention of the child care community. I appeal to the Minister to change his mind on this scheme.

Ciarán Lynch (Cork South Central, Labour)
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I support the points raised by my party colleague, Deputy Kathleen Lynch, on the proposed restructuring of the child care service which will result in radical changes to the existing scheme.

Independent examination of this issue shows that additional charges will be placed upon parents. It also shows that the operational costs for community child care services will be recreated and will have to be recouped locally because of the additional costs arising from the restructured process. This will also result in a reduction of services at local level and possibly lead to the closure of numerous community child care services across the country.

Furthermore, the new process will remove the social flexibility and mobility which are currently built into the service and which are a key aspect of it, namely, that children from different income groups can come together just as they do in the primary school sector. In fact, if we applied the logic that the Minister is applying in the child care area to the primary school sector, we would see how bizarre that thinking is. It will also make it impossible to maintain standards and will undermine years of work in developing standards in this area.

The irony of all of this is that European funding and local effort have developed a good model of practice for child care in this country. This has taken community child care out of the Dark Ages, yet the Minister is now proposing to make these child care services a victim of their own success by using these measurements against them.

In effect, the Minister is proposing to create what is called — I use the terms that local community child care services propose — a ghettoisation of the service, driving out working parents on low incomes who will now be penalised by no longer being able to afford or to avail of child care in their local community.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I thank Deputy Kathleen Lynch for raising this matter.

The main supports the Government makes available to parents to assist them with their child care costs are child benefit and the early child care supplement. The latter payment, which is in recognition of the higher child care costs of pre-school children, is the responsibility of my office, and it alone amounts to expenditure of over €400 million in a full year. These payments are universal and benefit all parents, regardless of their income, labour market status or the type of child care they choose. In addition to these universal supports, Government child care policy has also recognised the need to target additional supports towards disadvantaged families.

Under the Equal Opportunities Childcare Programme 2000-2006, EOCP, which was initiated by the Ceann Comhairle when he was Minister for Justice, Equality and Law Reform, and which was co-funded by the Irish taxpayer and by the European Union, targeted support was provided through the staffing support grant scheme. Community based not-for-profit child care providers with a strong focus on disadvantage were awarded grant aid towards their staffing costs to allow them to offer reduced fees to disadvantaged parents. Funding under this scheme was originally awarded for a limited period during which services were expected to move towards sustainability. This funding was subsequently continued to the end of 2007, where it was considered necessary to enable services to remain accessible to disadvantaged parents. This continuation funding was subject to the condition that tiered fee structures were implemented by the services in question.

Under the National Childcare Investment Programme 2006-2010, NCIP, the successor programme to the EOCP, a new scheme to support community child care services with a focus on disadvantage will be introduced in January next and will continue to complement the universal supports in place for all parents. The community child care subvention scheme, CCSS, has been allocated €153 million over the next three years, representing a 16% increase in funding over the EOCP staffing scheme. Under the new scheme, services will be grant aided according to the service they provide and the profile of the parents benefiting from them. In turn, the subvention received by the services will be reflected in the reduced fees for parents who qualify as disadvantaged under the scheme.

I am sure the Deputies will agree that the provision of additional targeted support for disadvantaged families is a necessary component of any equitable system for supporting families with the cost of child care. Any such targeted approach must have a cut-off point and it was considered that the income limits for family income supplement were the most appropriate, given the scale of the scheme and its focus. The Deputies may be aware that the current FIS limit for a family with three children under 18 stands at €625 per week after tax, while the minimum wage currently stands at €8.65 per hour, or €346 for a 40 hour week, and the average industrial wage as of March this year amounted to €615 per week.

It is considered that the new scheme will provide an effective framework for the continued targeting of additional resources towards disadvantaged parents and their children while continuing to support community child care services generally. The scheme has been informed by and takes account of a number of enhancements recommended by the report of the value for money review of the EOCP, which consulted widely with stakeholders, including child care providers, before reaching its conclusions. These enhancements include the fact that the subvention to services will be more responsive to the level of service provided, as well as the degree of parental disadvantage supported. The ceiling for funding which existed under the previous scheme is being removed. Account will also be taken of all of the operational costs of the service rather than staffing costs alone. Services, including full-time, part-time and sessional ones, which at present are, in some cases, inaccessibly priced for disadvantaged parents, will be available to them at more appropriate rates under the new scheme.

Existing EOCP staffing grant recipients who enter the new scheme will continue to be funded at their current level until July of next year. My office has recently concluded a series of regional meetings with existing grant recipients to outline the details of the new scheme and to gather feedback from the services themselves. These meetings have been useful, both in explaining how the scheme will work, and in allowing groups propose changes to how the scheme will be operated, a number of which have been taken on board already.

It is important to restate that the more detailed and comprehensive data which will be generated by the new scheme between now and the end of December will be analysed by officials in my office. If appropriate, any adjustments necessary to secure the best outcomes for child care services and for disadvantaged parents and their children will be considered by the Government in early 2008 and well in advance of the commencement of the new funding levels in July of next year.

In the meantime, groups can continue to receive funding at their current rate up to the end of June 2008. To qualify for the continued funding, groups must submit the information required for the assessment of the impact of the new scheme by early November and I would appeal to them to do so, and ask other Members of the Oireachtas to do so. It is important to emphasise that there are no changes between now and July of next year.

It is worth repeating that this Government has built a formal child care structure from a low base. Since 2000, we have created over 35,000 new child care places in the community and private sectors and supported over 26,000 more. Under the EOCP, €500 million has been allocated from 2000-2006, accounting for over 3,300 grants to a mixture of community and private providers.

In real terms, this Government will have spent over €1 billion of public money on the child care sector by 2010. Given the fact that the new subvention scheme actually increases funding by 16% over the EOCP staffing scheme, I refute in the strongest possible terms the suggestion that the Government has suspended such support. Nothing could be further from the truth and as I have said, any adjustments which might be considered necessary will be considered by the Government once the relevant data has been analysed.