Written answers

Tuesday, 3 February 2004

Department of Justice, Equality and Law Reform

Child Care Services

12:00 pm

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Question 434: To ask the Minister for Justice, Equality and Law Reform the plans he has to increase funding opportunities through the equal opportunities child care programme to adequately support the provision of quality child care; if, in particular, he will consider removing the existing cap on the staffing grant available from the EOCP to ensure that the financial allocation is an accurate reflection of the full costings rather than a contribution to the service; and if he will make a statement on the matter. [2708/04]

Photo of Michael McDowellMichael McDowell (Dublin South East, Progressive Democrats)
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As the Deputy may be aware, the Government responded to the issue of increased demand for quality child care by providing, with EU assistance, almost €437 million to my Department to facilitate the operation of the Equal Opportunities Childcare Programme 2000-2006, EOCP.

At this stage of the programme, over €249.2 million has been committed in funding, of which €206.5 million has been allocated in capital and staffing grants to child care providers and community groups and €42.7 million to quality improvement. It is estimated that the funding allocated to date to child care providers and community groups will create over 27,200 new childcare places and will also support over 26,200 existing places. A significant part of the remaining funding will be used to meet the ongoing costs of supporting childcare services in areas of disadvantage.

Support towards staffing costs under the EOCP is only made available to community based projects which can show that they are addressing disadvantage and are assisting parents who are in employment, education or training.

There has been considerable demand from community based groups for staffing grant assistance under the programme. To date, funding of €92.1 million has been allocated in staffing grants providing financial support for more than 3,200 child care workers, generally over a three year period.

A number of community groups have recently come to the end of their initial allocation for staffing costs but their funding is being maintained temporarily at current levels where groups which received staffing assistance can show that they are providing an adequate level of service and are targeting disadvantage. This is an interim measure pending the outcome of a review by the child care directorate in my Department on the future arrangements for ongoing staffing grant assistance to be completed later this year.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Question 435: To ask the Minister for Justice, Equality and Law Reform if he will make a statement on the progress to date in implementing the national child care strategy of 1999. [2709/04]

Photo of Michael McDowellMichael McDowell (Dublin South East, Progressive Democrats)
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As the Deputy may be aware, the national child care strategy was drawn up by an expert working group on child care chaired by my Department in the context of Partnership 2000. Key among these recommendations was the designation of my Department as the lead Department with respect to the development of child care to meet the needs of parents in employment, education and training. These recommendations formed the basis of the €436.7 million Equal Opportunities Childcare Programme 2000 — 2006 which is aiming, inter alia, to increase by 50% the supply of centre based child care places by programme end. The programme also has a focus on many of the quality issues which were identified in the child care strategy and aims to ensure that there is a co-ordinated approach to the delivery of child care services throughout the country.

To date, my Department has allocated over €249.2 million in funding under the EOCP. Of this, €209.5 million has been allocated in capital funding for community based-not for profit and private child care facilities and staffing funding for community based-not for profit groups, with €42.7 million allocated to quality improvement measures, including funding for the 33 city-county child care committees and seven of the national voluntary child care organisations. This funding allocated to date will lead to the creation of 27,200 new child care places, leading to the expectation that the original target of 28,300 new places will be exceeded. Much of the uncommitted funding will be required towards the ongoing costs of existing projects and for allocation towards capital and staffing projects which best meet the programme criteria in terms of value for money and service need.

Staffing grant assistance is available under the EOCP to help with the staffing costs in community based-not for profit child care facilities which support disadvantaged families where the parents can avail of employment, training and education.

The EOCP continues to support valuable work to enhance the quality of child care available throughout Ireland. Both the national voluntary child care organisations and the city and county child care committees have drawn up strategic plans, closely linked to the aims of the EOCP, which enhance awareness among child care practitioners through training, networking and an array of other initiatives. Special provision is made for childminders who will shortly be able to avail of small capital grant assistance linked to participation in a childminding quality awareness programme.

A number of the other recommendations fall within the remit of my Department. All groups in receipt of staffing funding under the EOCP are required to provide details of their child care staff to my Department for the purpose of Garda clearance. A working group has been established by the Garda Commissioner to examine the issue of Garda clearance and is expected to report in the near future.

My Department established the National Childcare Co-ordinating Committee, NCCC, with a remit to oversee the development of an integrated child care infrastructure throughout the country; address specific policy issues; and, through its various sub-groups, develop and inform national strategic actions in the sector, such as training and certification, diversity and multi-culturalism. To date the NCCC has developed a model framework for education, training and professional development in the early childhood care and education sector which will inform training and accreditation for the sector, has developed national guidelines for the notification of childminders, has developed a new policy document on school age child care which I hope to launch later this year and is developing two series of guidelines for multiculturalism and inclusion in child care aimed at child care practitioners and at parents.

A number of other Departments have responsibility for the implementation of some of the recommendations of the national child care strategy. The introduction of the national minimum wage has ensured that child care practitioners receive a better standard of pay than heretofore while the increased provision of accreditation and certification will lead to the development of a more attractive sector offering real employment opportunities with the prospect of career progression. FÁS has been very proactive in the delivery of training for the sector, as have the NVCOs.

A review of the Childcare (Pre-School Services) Regulations 1996 is at an advanced stage at the Department of Health and Children which has also recently introduced a system of voluntary notification for childminders. The Minister for Education and Science is developing standards for early childhood care and education and guidelines for a curriculum for the sector through the work of a number of agencies operating under his Department. The Minister for the Environment, Heritage and Local Government introduced new planning guidelines in relation to the provision of child care facilities in new developments.

The expert working group made a series of recommendations in relation to the so-called demand side of child care. Government policy in the area of child support aims to provide assistance which will offer real choice to parents and which will benefit all children. In that context it has been decided that, as a matter of policy, child benefit will be the main fiscal instrument through which support will be provided to parents with dependent children. Child benefit provides assistance to all parents in whatever caring choices are most appropriate for them and their children. In addition, unlike tax relief, it provides support to parents irrespective of their income status.

In line with this policy approach, the Government commenced a major initiative to substantially increase the rates of child benefit. In 2001 the rate for the first and second child was increased by almost €32 per month and by €38 per month for the third and subsequent children. This represented an increase of over 50% on the rates prevailing in 2000. Similar monetary increases were provided in 2002. Further increases were implemented in 2003 and in budget 2004 the Minister for Finance, Deputy McCreevy, announced additional increases of €6 and €8 per month, respectively, in 2004 which are around double the projected inflation rate for next year. All of this means that, since 1997, the child benefit rates have increased by more than 230% compared with a projected increase of inflation of only 28% over the period 1997 to 2004.

With regard to the tax measures in the area of child care, it should be noted that the provision of certain free or subsidised child care facilities by employers is exempt from a benefit-in-kind charge on employees benefiting from the facilities. The benefit-in-kind exemption applies if the employer provides the facilities in-house, or in a premises made available by the employer in another location. The exemption also applies if an employer provides child care facilities jointly with others, for example, with other employers, or with a voluntary body. In such circumstances, the employer must be wholly or partly responsible for financing and managing the child care facility.

The employer may opt not to be involved in the management of the child care service. In such circumstances, the benefit-in-kind exemption will be restricted to cases where the employer provides financial support for items of capital expenditure and equipment but not other costs incurred by the employer. This provision was introduced to make the scheme more attractive to employers who did not want the job of managing the facility.

In, addition, capital allowances are available for capital expenditure incurred on or after 2 December 1998, on the construction, extension and refurbishment of a building or part of a building which is used for the purpose of providing a pre-school service or a pre-school service and a day care or other service to cater for children other than pre-school children. The allowances are also available for expenditure incurred on the conversion of an existing building or part of a building for use as a child care facility. The premises must not include any part of a building in use as, or as part of, a dwelling. The allowance is at a rate of 15% per annum for the first six years and 10% in year seven. Accelerated capital allowances of 100% are available in respect of expenditure incurred on or after 1 December 1999. Property developers are excluded from claiming the accelerated allowances. This accelerated allowance is available to both owners of the child care facilities and also to investors who wish to invest by way of leasing arrangements. Where the qualifying expenditure is incurred by an individual investor, or group of such investors, subject to certain conditions, and the premises is leased to the operator of the child care facility, any excess of capital allowances can be off set against the investor's other income subject to an annual €31,750 limit. No such limit applies in the case of expenditure incurred by owner-operators or corporate investors.

These reliefs are available to all employers, regardless of size, once the appropriate conditions are satisfied. Finally, it should be noted that child care services are generally exempt from VAT, so no VAT should be chargeable on fees levied by crèches. Progress on the implementation of the national child care strategy to date has resulted in a very fast-growing sector with a dynamic which, on the one hand, helps to meet the child care needs of the parents of Ireland while, on the other hand, ensures that the children receive quality child care.


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