Éamon Ó Cuív (Galway West, Fianna Fail)
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640. To ask the Minister for Children, Equality, Disability, Integration and Youth the steps he has taken to reduce the cost of childcare in these inflationary times; the steps he has taken to control the increase in childcare costs in the summer months when the early childhood care and education programme is not running; and if he will make a statement on the matter. [32795/22]

Roderic O'Gorman (Dublin West, Green Party)
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Significant investment is being made by my Department to support parents with the costs of paying for early learning and childcare and to support providers with the costs of delivering early learning and childcare.

The National Childcare Scheme is currently supporting thousands of families to offset their costs. A recent review of the NCS showed that:

- 38% families had more than half of their early learning and childcare costs were covered by the NCS;

- 56% families had more money to spend due to the scheme; and

- 28% families were working more because of NCS, with 8% reporting that they would not be in work without it.

NCS operates year round and can vary the level of subsidy in line with differing parental needs for early learning and childcare at different points of the year.

I recognise however that the burden on some families remains high and we need to do more to ensure affordability and sustainability.

An Expert Group to develop a new funding model for the early learning and childcare sector made recommendations to Government in December which were accepted in full. This new funding model is now beginning to be implemented to improve quality, affordability, sustainability and accessibility of services.

The package of measures for the sector announced in Budget 2022 was informed by the Expert Group recommendations. The package includes a new Core Funding stream valued at up to €221 million in a full year. Making early learning and childcare more affordable to parents and improving services' sustainability are central objectives of Core Funding, along with improving quality including through better terms and conditions for the workforce.

A central condition of Core Funding will be that providers agree not to increase fees above those which were charged last year. This will give parents greater certainty about what they will be charged and ensure that increases to NCS subsidies are not absorbed by fee increases. The approach to fee management will be developed further over time.

Budget 2022 also extended universal NCS subsidies for children of all ages up to 15. This change will come into effect from August. It also changed how ‘wraparound hours’ for NCS subsidies are determined and this is already in effect. The Expert Group report also recommended increasing the NCS rates and this will also be implemented for future years.

Ensuring no fee increase, in tandem with developments to the NCS, will together deliver improved affordability for parents.

In terms of costs for services, Core Funding will contribute to services’ sustainability and will significantly increase income for the overwhelming majority of services and provide greater funding stability. Core Funding will be allocated based largely on capacity. Core Funding will give providers a stable income source based on the nature of the service they deliver. A provider’s income will now consist of Core Funding, NCS and ECCE subsidies, and parental fees. Structuring Core Funding primarily based on capacity means that services will have an allocation each year that will not fluctuate in line with children’s attendance.

Since August 2020, early learning and childcare services had been able to access the Employment Wage Subsidy Scheme (EWSS) without having to demonstrate a reduction in turnover. This continued to be available until the end of April. This significant level of funding to the sector has ensured that fees have remained largely static for the last two years and that providers have continued to be sustainable.

Following the tapering of EWSS and prior to the introduction of Core Funding, a Transition Fund is available to providers. The primary conditionality of the Transition Fund is an agreement not to increase fees from September 2021 levels. I am delighted to report that so far 94% of services have agreed to operate a freeze on parental fees by coming into contract for the Transition Fund.

The Transition Fund is designed to support the stability and sustainability of services in the interim period between the end of the Employment Wage Subsidy Scheme and ahead of the introduction of the new Core Funding Scheme in September 2022.

As you can see, I am committed to putting in place a strong foundation to improve affordability for parents and sustainability for services, as well as improved quality of provision, including pay and conditions for the workforce. This foundation will allow for further developments in future years.