Barry Andrews (Dún Laoghaire, Fianna Fail)

I welcome the opportunity to address this House on the budget for 2009. I thank Senators for requesting a debate on this matter at this time, especially as major changes are taking place in the Irish economy and on a global scale.

As the Minister for Finance outlined in his budget speech, and as reiterated by all of my colleagues in Cabinet, there is no doubt that the economy is facing major challenges. However, the Government is rising to these challenges through the package of targeted interventions and corrective actions unveiled in the budget for 2009. These actions are necessary for the responsible management of our public finances and to safeguard our economy for the future.

I wish to outline to the House those key aspects of the budget that impact on the Vote of the Office of the Minister for Children and Youth Affairs, in particular subheads A and B which contain the main funding allocations and which are most affected by the budgetary changes. I look forward to exchanges with Senators and to hearing what suggestions they might have to improve child care services in general and on the operation of the services provided by the city and county child care committees. Their ideas will be useful to me in planning strategy for 2009. There is no question but we will have to make changes and think laterally and strategically. That applies to every sector of the economy. I believe everybody shares the common objective of having better outcomes in child care. How we achieve that is a matter for consultation with the national Parliament, which is why I welcome the opportunity to hear the valuable and timely views of Senators.

A key area of Government policy, which is implemented by my office, is the National Childcare Investment Programme 2006-2010, NCIP. The NCIP has a total allocation of €575 million between 2006 and 2010, of which €358 million was in respect of capital funding and €217 million for current funding. The programme was launched in December 2005 as a successor programme to the Equal Opportunities Childcare Programme, EOCP, which was introduced in 2000 and continued to operate until the end of 2007. The introduction of the NCIP at that time, and its inclusion in the national development plan demonstrated a clear and ongoing commitment by the Government to meeting the needs of parents and their children for quality child care services.

The proposed allocation for the NCIP in 2009 consists of both capital and current funding and I would like to outline the position regarding the current funding allocation first. I am pleased the Government has recognised the importance of sustaining our commitment to quality child care services and has maintained the 2009 current funding allocation under the NCIP at its full 2008 level of €73.578 million. That will enable my office to continue to support child care across the State as well as to provide sufficient funding for the community child care subvention scheme, CCSS.

Due to administrative savings that will be made in 2009, the funding level for the CCSS will increase by €1.4 million. The CCSS was introduced in January of this year and supports community-based child care services to enable them to provide reduced child care fees to disadvantaged and low income parents. While €37 million was spent in 2007 on the previous support scheme for community child care, more than €50 million is being spent on the CCSS in 2008. The proposed current allocation to my Vote in 2009 of €73.578 million confirms the Government's continued commitment to supporting community child care services and to assisting disadvantaged and low income parents.

As more than 100 new services have entered or are in the process of entering the scheme, that will mean approximately 900 community services will be supported with significant levels of grant funding in 2009. Members will be aware that in different parts of the country community child care facilities face challenges and different circumstances. Equally, private child care facilities face challenges. I am interested to hear what points Senators will make in their contributions. There is no doubt we planned for increased investment in improved child care facilities in the context of the expansion of the economy, and the increased demand on services given the greater number of people at work. We need to plan for a different situation in the coming years, and new thinking is required. I welcome today's debate and look forward to what Senators have to say.

The current allocation will also enable my office to continue to support the network of 33 city and county child care committees, CCCs, which were established in 2001. With the introduction of the national childcare investment programme in 2006, the child care committees have worked more closely with my office to deliver the objectives of the Government's major investment programme in child care and they now play a key role in assisting grant applicants to avail of both capital and CCSS grant funding. They also continue to provide essential local supports to both child care providers and parents, including organising training and other quality raising measures. The committees work closely with childminders who continue to be significant providers of child care in Ireland. As with all bodies in receipt of State funding, they will be subject to a 3% cut in their administrative budgets in 2009. However, I am pleased that their funding in 2009, which is expected to amount to €13.8 million, will still be at a level which, on average, is 60% more than was the case in 2005 prior to the introduction of the NCIP.

The current allocation will also continue to support the work of eight major child care organisations, including Barnardos, the IPPA, the NCNA and Childminding Ireland. Those organisations have contributed greatly in the past to the development of quality child care in Ireland and I hope to strengthen those links in the coming months with the location of expertise from the Centre for Early Childhood Development and Education, the CECDE, into the early years policy unit of the Department of Education and Science, which is co-located in my office. I believe this development will provide a clear starting point for a new focus on early years care and development at central level.

I have already asked officials in my office to draw up proposals that will ensure a more effective use of our existing framework and resources, taking account of the deployment of the expertise and of the supports given to child care organisations. The eight organisations that are funded by my office are expected to receive €3.2 million in 2009, which is 23% more than was the case in 2005 in advance of the NCIP. The current funding allocation will be accompanied in 2009 by a capital allocation to the NCIP of €60 million. That capital allocation will meet the capital funding requirement, which is expected to arise in 2009. In 2008, the capital expenditure is expected to amount to less than €80 million.

The commitment to the NCIP and to funding commitments until 2010, will continue to be met. However, in the context of a reduction in public expenditure during 2009-10 it is considered appropriate to target the programme's resources in a way that ensures the continued delivery of quality child care services as well as to ensure sufficient resources to meet existing capital commitments. In effect, the capital allocation available to the programme will be extended over a longer timeframe, beyond 2010. That approach was adopted under the previous EOCP child care programme, which was extended by an additional year to 2007. That provided additional flexibility to child care projects, in particular those in the community-based, not-for-profit sector who qualify for large-scale grants of up to €1.2 million.

Applications for capital grant funding for child care projects, particularly large-scale projects in the community sector, generally require a significant period of time to bring proposals for grant funding through to the point at which they are in a position to draw down funding. That process can take up to two years, or longer in some cases. Extending the timeframe for expenditure is expected to bring each year's allocation of funding more closely in line with the actual demand for grant drawdown each year. That will help to ensure that all of the capital allocation for each year is fully utilised. I wish to make it clear, therefore, that capital grant applications under the NCIP will continue to be accepted and processed by my office. I understand that applications amounting to over €200 million in grant aid have been approved to date and a further round, with a value of over €80 million, is expected to complete the assessment process before the end of the year.

In the context of the longer timeframe which is now envisaged for the NCIP, the review process that was expected to take place with a view to considering any successor programme, will now be undertaken at a later point. The NCIP is already well on the way to achieving its target of creating 50,000 additional child care places and the funding approved to date will result in the creation of approximately 30,000 additional child care places as well as supporting a further 44,000 existing places.

A further important area of direct support that my office oversees for parents with young children, is the early child care supplement, ECS. The ECS was introduced in 2006 as an additional, direct quarterly payment, in arrears, of €250 per quarter, or €1,000 per annum, to parents of children aged under six years. The payment was increased in January of this year by 10%, bringing it to a total of €275 per quarter, or €1,100 per annum. I am pleased that payment will continue to be made to assist parents with the high costs associated with caring for young children in their pre-school years.

The 2009 allocation for the ECS within my Vote will amount to €397 million. In 2008, expenditure on the ECS is expected to amount to approximately €480 million and that would have been expected to increase in 2009, to €490 million. However, arising from the budgetary changes introduced, the administrative arrangements for the ECS will be revised with effect from January 2009. The revised administrative arrangements are expected to result in savings of €93 million in 2009 and savings of €54 million in subsequent years.

From January 2009, the ECS will be paid on a monthly basis, which should assist parents in managing their ongoing costs, many of which are monthly, in providing for the care of their children. As a result of this change, parents will receive an ECS payment for January 2009 in February, a payment for February in March and a payment for March in April, rather than having to wait for the three payments to be made as one single payment in April. As the monthly ECS payment will be rounded up to €92, the annual payment will increase to €1,104 at a cost of €2 million. It is proposed to have the ECS payments made to parents on the second Monday of each month.

Given that the ECS was implemented as a quarterly payment, it was decided the quarterly payment in respect of the final quarter of each year, October-December, would be paid in December rather than January. Arising from the fact that the ECS will from January 2009 be paid on a monthly basis, the question of making an advance payment for the final quarter will not arise. As a result, a once-off saving to the Exchequer amounting to €39 million is expected to arise in 2009.

In addition, as a quarterly payment, despite being a payment made in arrears, the decision was taken to assist parents during the first quarter of their child's life. As a result, parents receive the payment in respect of the first quarter of their child's life and the quarter in which their child ceased to qualify. This issue will not arise when the change to a monthly payment, as in the case of child benefit, takes place. This is expected to result in an annual saving to the Exchequer of €20 million.

I have mentioned that savings will arise from paying the early child care supplement on a monthly basis. A separate budgetary change to the scheme is expected to yield a further saving of €36 million in a full year. The age at which children cease to qualify for the payment will be reduced from six to five and a half. The early child care supplement was originally introduced as an additional, targeted measure to support parents as they care for young children who have not yet started school. Children generally start primary school at the age of four or five. Their parents will continue to receive early child care supplement payments in respect of them during this period. As the compulsory age to commence primary school is six, virtually all children who are aged more than five and a half in September of each year go to school. Therefore, this measure is not expected to impact significantly on the parents of pre-school children.

I thank the Cathaoirleach for giving me an opportunity to speak on this important subject. I hope we can have a frank exchange of views in the course of this discussion. I am keen to hear Senators' opinions on the shortfalls that continue to exist in the child care sector. I apologise because I will have to leave before the conclusion of the debate. My colleague, the Minister of State, Deputy Moloney, will take my place. I will review the comments which are made.