Budget 2018 Analysis

Yesterday, Tuesday 10th October, Budget 2018 was announced from the floor of Dáil Eireann by Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD. He flagged that an additional €20 million in new money is being allocated in 2018 toward the continued development of ‘affordable childcare with a focus on children, parents and providers’. You can read Minister Donohoe’s full Budget 2018 Statement here. While detail of the ‘childcare measures’ was sparse at this stage, ECI’s reaction to the overall level of investment was one of disappointment.

You will recall that ECI asked for €250 million (0.1% of GDP) in Budget 2018 along with a commitment to sustain this level of increased investment year on year over the next 5 Budgets. ECI’s 20 Budget 2018 recommendations can be viewed here. We argued that this level of significant and sustained investment is essential to Ireland eventually meeting the international benchmark of 1% GDP investment in early years. We are therefore very disappointed that this year’s level of new investment represents less than 0.01% of GDP. You can read ECI’s initial response to the Budget 2018 announcement here.

Further detail about the childcare measures emerged in the Minister for Children and Youth Affairs, Katherine Zappone TD’s Press Conference later yesterday afternoon and the most detailed breakdown was then circulated in a letter to members of the National Early Years Forum, which we are sharing here with members.

While there are some positives to be found in the following announcements, and the Minister should be credited with the creative and impactful use of sparse resources for the early years, we remain far off delivering a world-class early childhood care and education system for Ireland.

Developments in the Early Childhood Care and Education (ECCE) Scheme
The move away from rolling enrolment to a single-entry point from September 2018 is welcomed by ECI. We have made numerous representations to DCYA querying the rationale and evidence upon which the policy was introduced back in September 2016. We were concerned about the inherent discrimination whereby children were entitled to different durations of ECCE depending on their date of birth and the administrative burden for services having to register children at three points during the year. A more recent issue arose around the commercial rates liability of ‘ECCE only’ services charging parents to hold an ECCE place for children at the next intake date. These concerns will all be addressed by a return to a single-entry point registration system.

The reduction in the qualifying age of children to two years and eight months does throw up practical concerns that require careful scrutiny. Not all children are toilet trained at two years and eight months, which is a policy requirement for many services before taking in children. Depending on the service type, there may not be changing facilities for children still in nappies, or they are located elsewhere in the service but staff are required to remain in the ECCE room to maintain the adult:child ratio.While ECI believes in a play-based curriculum and that a mix of age groups is a positive for children, Early Years Educators my need support in working with the new age range, since a difference of a few months can be significant in terms of development in very young children. This change in policy could also see children being enrolled in Primary School much earlier,which would be unwelcome.

ECI welcomes the increase in ECCE capitation paid to services. While it falls short of our Budget ask, we looked for an increase to €75 per child per week at the standard capitation rate and €85 per child per week at the higher capitation rate over 42 weeks, it is an acknowledgement that Providers need more financial support to deliver quality and sustainable services to children. We note that Minister Zappone has linked the increase in ECCE capitation to improve staff pay. She said:

“The wages in the early years sector are low and do not support the recruitment and retention of high quality staff. I hope the increase in capitation I am announcing today will assist employers to improve conditions for their staff. I am aware it is not something that can be sorted overnight but I believe it is a step in the right direction. The Independent Review of the Cost of Delivering Quality Childcare which I have commissioned will assist me in seeking more investment for childcare providers over the coming years if this is independently proven to be required.”

Despite suggestions in the media today that the increased capitation would be passed onto parents though a reduction of fees in full day care and part time day care services, DCYA has confirmed to ECI this evening that the increase in capitation is targeted at increasing the quality of care of education provided through ECCE, and in particular to supporting the recruitment and retention of high quality staff. It is not a mechanism to offset fees paid by parents for time their child may spend in creche outside of ECCE hours.

Other Early Years Developments
ECI warmly welcomes news that Programme Support Payments are secured and certain for 2018 and thereafter. ECI made a strong case for the continuing recognition of the pivotal role played by services in the management and administration of the Government funded childcare schemes. We will be looking for more detail from DCYA as to when the support payments will be paid to services.

Despite the low level of investment in sustainability supports here, it is welcome that the fund will support all providers, Community and Private whose viability is under threat. ECI will be seeking clarity on the specifics of this fund, which are not yet known.

Again, additional clarity is needed about the nature of this investment. ECI maintains its position that new funding to the Tusla Early Years (Pre School) Inspectorate should only be released when the composition of their inspection teams is broadened to include inspectors with relevant qualifications and expertise in early childhood care and education. ECI will continue to press for the extension of the Department of Education and Skills’ Early-Years Education-focused Inspection (EYEI) remit to inspect the quality of education to the under 3s cohort. This ask is further supported by DCYA’s intention to reduce the entry age into ECCE to two years and eight months.

We know there is an increasing trend among providers towards an ECCE-only model, alongside school age childcare, as a means of maintaining their viability. The high cost of providing childcare for under 3s has led many services to limit, or remove entirely, childcare services for babies and toddlers. ECI believes there could be scope within the Capital Fund to support services for whom the continuing provision of childcare for under 3s is at risk and we will continue to raise our concerns to the Minister and DCYA. Furthermore, DCYA must develop a strict eligibility requirement and a strict timeline for the completion of the funding application process. Capital funding opportunities should be advertised no later than January of the relevant year, with an application deadline in March and decisions about funding finalised and published no later than May. It is essential that services are given the information they need before the summer to plan effectively for the next programme year (September).

Parental Leave
ECI is very disappointed, as no doubt are the new and impending parents across Ireland, that there was no extension of paid family leave that could be shared by parents following maternity and paternity leave entitlements. This would have contributed to a reduction in childcare costs for families but most importantly it is well established that it is in the child’s best interests to be cared for by a parent for at least the first 12 months of life. Ireland has the fourth shortest period of paid parental leave in Europe and this must be actively addressed by Government.

Other Budgetary Measures
There are of course additional measures in Budget 2018 that will impact members in their business and personal capacities. For example, the increase by €200 to the earned income credit for the self-employed and the increase in the national minimum wage to €9.55 per hour from 1st January 2018. There are numerous summaries of Budget 2018 in today’s national media, for example the Budget 2018 supplement in the Irish Times.