In response to representations made by me on 5 July to Minister O’Gorman on protecting funding for the sector, I have received the following reply:
Dear Deputy Shanahan,
Thank you for your correspondence of 5 July in relation to the Early Learning and Care (ELC) and School Age Childcare (SAC) sector.
Pay Scales for Managers of City and County Childcare Committees
Firstly, my Department carried out a review of the pay scales for managers of City and County Childcare Committees (CCCs) at the request of CCC managers and the majority of the CCC Boards of Management.
It is noted that CCC staff, including managers/co-coordinators, are employed by their respective Board of Management; they are not employees of my Department. My Department has concluded that the salaries for CCC Managers, and all other CCC staff, should be determined by each Board of Management. Each CCC Board of Management may set their own staff salary scales, which is to be met from within their existing funding.
Increased Childcare Charges for Parents
In relation to the second issue that you have raised, I am very concerned to hear of providers proposing to increase charges to parents at a time when the Government continues to support early learning and childcare providers significantly. In view of the extent of State support, increases are not justified at this time.
One of my key priorities in Government is to achieve affordability of early learning and care and school age childcare. The Programme for Government commits to substantially reducing fees to parents while supporting quality service provision. The Government has been strongly supportive of the sector, particularly since the onset of Covid-19. We have provided substantial additional supports to allow services to operate sustainably throughout the pandemic, acknowledging that there are higher delivery costs and many extra practical and financial challenges to be met. One of the objectives of these supports was to ensure that the higher delivery costs due to public health requirements and lower occupancy were not passed on to parents.
Employment Wage Subsidy Scheme for Childcare Providers
In addition to my Department’s funding schemes, services can currently participate in the Employment Wage Subsidy Scheme (EWSS) which provides an average of 50% of normal operating costs for services. The EWSS has been paid at enhanced rates since October 2020, and is due to continue until the end of December 2021. Most businesses must demonstrate a 30% reduction in turnover to be eligible for supports under the scheme. When the EWSS was introduced in August 2020, I negotiated a special arrangement for registered ELC and SAC services to be exempt from this turnover test and I can confirm that these special arrangements will be extended for Quarter 3 of 2021. Officials in my Department are engaging with the Department of Finance in the context of wider proposals for the EWSS in Quarter 4.
I recognise that early learning and care and school age childcare services are private businesses and are free to set their own policies regarding the charging of fees and contract conditions. Given the substantial additional supports allocated to the sector, and the assurance that there will be no sudden withdrawal of Government supports, there is no case for an increase to fees paid by parents.
Covid-19 Impact Support Grant for Childcare Services
I might add that where providers require further financial assistance in addition to current supports available, my Department operates a Covid-19 Impact Support Scheme. This is in addition to the existing financial supports for services. The purpose of the Covid-19 Impact support grant is to support the sustainability of ELC and SAC services who may be left with short-term sustainability concerns due to lower attendance or higher costs arising from COVID-19. This scheme will support services to remain open without increasing their Registered Fees to parents or guardians.
Funding is provided to successful applicants which have experienced an income/expenditure deficit in respect of the childcare aspect of their business/organisation, and do not have sufficient funds in reserve to absorb this deficit. Funding is not available to replace all lost income; funding is available only to fill an actual shortfall where the applicant cannot meet all of their current operating costs. The funding will be available on a rolling basis throughout 2021 for eligible ELC and SAC services that require further financial assistance. The process for accessing this funding begins with the City/County Childcare Committees; any service that has concerns about their viability should therefore contact their local CCC in the first instance.
New Funding Model for Childcare
Looking to the future, my Department will be developing a new funding model for early learning and care and school age childcare that provides additional resourcing to services subject to quality and affordability. An Expert Group has been progressing this work since late 2019 and I expect their report to be finalised in November. An essential and top priority for this Group will be to make recommendations on a mechanism to control fee rates for different types of provision for ELC/SAC in return for increased State investment in affordability, quality and sustainability, as set out in First 5. I anticipate that the Expert Group’s work can contribute to informing the Budget 2022 process.
Extensive research has already been commissioned to inform the work of the Group. Frontier Economics, the Research Partner, have produced and published eight working papers, with three that directly address affordability issues including international comparisons of fees and public investment, approaches to funding the early learning and care sector, and mechanisms to control fees charged to parents. This research identifies international practice and learning that will be of value for the new funding model.
Alternative Childcare Providers
Finally, for parents who might wish to find an alternative provider, there are 30 CCCs across the country who can assist in identifying services in their areas. Further information is available at myccc.ie.
I hope that this information is of assistance.
Roderic O’Gorman TD
Minister for Children, Equality Disability, Integration & Youth