The 12-Month Review of The National Childcare Scheme

On 1 December, the Minister for Children, Equality, Disability, Integration and Youth published the findings of a 12-Month Review of the National Childcare Scheme (NCS) and the Work-Study Test Evidence Review.

Commissioned by the Department of Children, Equality, Disability, Integration and Youth (DCEDIY), the formal review by Frontier Economics of the first year of the NCS aimed to provide a basis for the Department to consider how effectively the Scheme is operating and whether it is meeting its objectives. It also aims to present key data and information to support the future development of the scheme. The purpose of the Work-Study Test Evidence Report is to review the evidence on the impact of such work-study tests on children’s development; parental labour force participation, and on providers and to consider how this evidence could inform use of the work-study test in the NCS.

Early Childhood Ireland welcomes the review of the NCS as an opportunity to improve the scheme which is the first ever statutory entitlement to financial support for childcare in Ireland and the mechanism through which our system of childcare can be transformed to meet the needs of young children and their families.

Findings from the review indicated some positive impacts for families accessing the NCS, including:

• Overall, 38% of families reported that half or more of their early learning and childcare costs were covered;
• More than half (56%) reported that the Scheme meant they had more money to spend; with 11% reporting they had much more money to spend;
• 26% reported that they were using more early learning and childcare;
• 28% reported that they were working more; with 8% reporting, they would not be in work without the NCS.

However, some emerging issues have also been identified that need to be addressed, including low awareness among parents, administrative issues experienced by providers, and barriers for some families accessing supports, including through the sponsorship arrangements.

Usability for Providers
Feedback from providers indicated a wide range of administrative issues and a large proportion reported having experienced specific problems. 51% reported experiencing between one and five problems and 45% reported experiencing more than five problems. Only 3% of providers did not report any problems.

Impact on Disadvantaged Families
One of the four policy priorities of the NCS is to reduce poverty and more specifically to narrow the gap between more and less advantaged children by enabling all children access to high quality, affordable childcare. The Review reported that positive impacts were substantially higher for families with lower incomes and for families living in more disadvantaged areas. However, the proportion of families which reported negative impacts on family finances was highest in extremely/very disadvantaged areas, where 14% of families reported they had less money to spend because of the NCS. In addition to lower subsidy rates, many families were reported to be receiving fewer subsidised hours because of the higher threshold of need for the NCS sponsorship and because children in families not meeting the work-study test were only entitled to standard hours. This was seen as detrimental for preschool children from vulnerable families which benefit developmentally from more childcare hours and for school children from vulnerable families which benefit socially and educationally from after-school care. It also found that the sponsor referrals process suffers from a number of weaknesses, including a lack of clarity in the criteria for support, parent reluctance to engage and share information with government bodies, a lack of knowledge or engagement by sponsor bodies and confusing bureaucracy.

Sustainability for Providers

The Review stated that wasn’t significant evidence of detrimental impacts on the provision in disadvantaged areas, but the effects may have been masked not only by the Covid-19 pandemic supports but also by the savers’ provision for legacy schemes. Moreover, there are initial signs and a logical case that the transition from the legacy schemes to the NCS may lead to reductions in capacity and other detrimental effects specifically in disadvantaged areas.

The Work-Study Test

In parallel with the publication of the 12 Month Review of the National Childcare Scheme, the Minister also published a Work-Study Test Evidence Review. This evidence review has generated two key findings for the use of the work-study test in the NCS

1. There is strong evidence that free or subsidised ELC for part-time hours are beneficial to both child outcomes and parental employment.
2. Second, the weight of evidence suggests that disadvantaged families benefit more from enhanced hours than more affluent families

Early Childhood Ireland welcomes the valuable findings in the Review of the National Childcare Scheme and the Work-Study Test in Ireland to improve the scheme and address the challenges for providers and children and their families. We will be monitoring the follow-up actions on foot of the Review as committed to by the government which cover a new awareness campaign, reducing the burden on providers and addressing the challenges around sponsorship.

Both reports are available here. If you have any questions, please contact our policy team to discuss any of the issues raised here.