Olivia Mitchell (Dublin South, Fine Gael)
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Question 83: To ask the Minister for Health and Children if her attention has been drawn to the concern amongst preschool providers with the free preschool scheme as proposed, that for commercial as opposed to community providers the proposed payment is inadequate, that the scheme will push up fees for child day care and close the majority of preschools and primarily the more expensive professional montessori schools; and if she will make a statement on the matter. [18398/09]

Barry Andrews (Dún Laoghaire, Fianna Fail)
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As the Deputy will be aware I have responsibility for the implementation of the new scheme to provide a free Pre-School year of Early Childhood Care and Education (ECCE) which was announced recently by the Minister of Finance. The scheme will allow children to avail of a free playschool place in their pre-school year, which will be provided for 3 hours per day, 5 days per week for 38 weeks. It will also allow children in their pre-school year who are attending a full or part-time daycare service to avail of a free session of 2 hours and 15 minutes per day, 5 days per week for 50 weeks. As the new scheme will be introduced from January next, the first full year will be from September 2010 and children availing of the scheme in January 2010 will have a reduced period of free pre-school provision.

Participating children must, normally be aged between 3 years 3 months and 4 years 6 months on the 1st September of each year. Exceptions will be allowed where children have special needs or it is necessary to accept children at an older age due to the enrolment policy of the local primary school. Participating services will receive capitation of €64.50 per week where children attend for 38 weeks, and €48.50 where they attend for 50 weeks of the year. Services will receive payments at the start of each term. Where the child is attending full-day or part-time childcare, the service will be required to reduce the childcare fees by the amount of the capitation. A participating service may also operate a pre-school service which is not within the scheme.

A major benefit for pre-schools arising from the Scheme is that it will introduce certainty in their income, with payments being made at the start of each term. For many months now, I have had private pre-schools and their national bodies approaching me about high vacancy rates in services, often of 20-25%, with many on the brink of closure as a result. For many, a significant part of their cost per place is to cover for unused places, and many pre-schools which had run 2 sessions per day have cut back to a morning session only, citing lack of demand. This scheme will save these pre-schools, and allow them see out what are, in economic terms, tough times ahead for all of us.

Certainly, I believe the suggestions from the Deputy that the scheme will push up fees for child day-care and close the majority of preschools are extremely wide of the mark. The very large majority of services contacting my Office since the announcement of the Scheme have expressed their support for the scheme in strong terms, and many are considering expansion of their service as a result. Similarly, I do not agree with the suggestion that services will increase fees for other children as a result of this new scheme. In these circumstances, it is not credible that a significant number of pre-schools could increase their fees for such children without seeing an actual decline in total income, as their vacancy rates would almost inevitably rise further. Such an outcome would benefit no-one, and so I do not expect it to come to pass.

It is of course a national scheme, and whatever the level of capitation, it is inevitable that some services would have been charging higher fees prior to its introduction. However, the level of capitation allowed for in this scheme is significantly higher than that proposed under the NESF's proposed free pre-school year scheme and is far higher than that allowed for under the scheme operating in Northern Ireland. In the current Budgetary circumstances, I am glad that it is higher, not just than the fees charged in most services in Ireland, but by a great many in Dublin. Services will also receive their payment at the start of each term, and will therefore have certainty about that income.

Concerning costs, the figures provided to my Office by services, even those arguing that the capitation should be higher, indicate that services will be sustainable under the new scheme, and owner-investors will get a fair return on their investments, and owner-operators who are themselves working in the services will receive a fair income for the hours they put into their services.

It is of course the case that some very high cost services may choose to stay out of the scheme, in much the same way as fee paying private Primary Schools choose to operate outside the national school system, but I believe that the very large majority of eligible services will participate in this scheme. Participating services may charge for additional hours (e.g. when open for 4 hours per day), or for optional extras such as dancing classes etc. However, the principle of free access for all eligible children in participating services will not be undermined, and all participating services must remain available to all in their community, regardless of the ability of parents to pay for additional services.