Pilot scheme for nationalised childcare costed at €53m

A pilot scheme intended to establish the cost of a public early childhood education and care system in which the fees paid by parents were capped at €50 per week has been costed by the Department of Children, Equality, Disability, Integration and Youth at €53 million.

The pilot, costed in response to a request from a political party formulating its own childcare policy, would cater for 6,000 children across a range of different services intended to be representative of the current sector.

An alliance of 30 organisations including the National Women’s Council recently called for a pilot project they said could serve as a stepping stone to a fully publicly run system.

There are many different views on how such a system might operate and the extent to which the Government would be directly responsible for employing staff or the provision.

The department has cautioned that taking over services from the private sector would involve very large-scale capital investment. Such a system seems more likely to receive greater funding and regulation of existing providers combined with some direct provision where black spots exist.

A specially established unit in the department is working on a range of options, likely to be presented to the next government, on a full-scale public system.

The unit was established in January on foot of a recommendation from an expert group, accepted in 2021, that options for a publicly funded system be properly explored.

The group said that “in the medium term, the Minister should mandate the department to examine whether some element of public provision should be introduced alongside private provision”. Work on this is said to be ongoing.

The Government will spend about €1.2 billion on childcare across a range of funding programmes over the course of 2024, with the families of almost 200,000 children benefiting from subsidies under the National Childcare Scheme which are paid to services nominated by parents. That number is projected to increase to 216,000 over the course of 2025.

Three Opposition parties – Sinn Féin, Labour and the Social Democrats – have proposed policies that would cap the fees charged for full-time childcare to €200-€250 per month, a drop of 80 per cent on what some parents are paying at the moment.

The Parliamentary Budgetary Office estimated the cost of the Sinn Féin proposals – which included childminders registered with Tusla – at an additional €327 million in their first full year, although it described the level of uncertainty in the projections as “high” as many of the costings involved were projections.

The department, however, has been amassing data from the returns it requires from services receiving supports under its Core Funding scheme.

It estimates the total cost of salaries of the more than 30,000 workers in the sector to be €1.041 billion, with pay accounting for 68 per cent of total costs.

The department estimates the total operating costs of private for-profit operators, who make up 75 per cent of the sector, to be €1.28 billion. Across the entire sector, 69 per cent of operator revenue now comes from the Government, the department says, with 30 per cent coming in the form of fees paid by parents.

Advocates for parents, provider representatives and academics in the area all suggest funding for the sector should be €4 billion or more if the standard of services offered here is to be on a par with what is offered in countries that are considered leaders in the area.