Richard Boyd Barrett: Urges State Action on Childcare Insurance Crisis

Minister, Michael Darcy's comments this morning struck fear into a lot of people that there was nothing they could do to intervene, the government to intervene in this situation where insurance costs were going through the roof because of course basically what he was saying is the cost either will result in the closure of creches or the cost will be passed on to parents. Now just to give you an example, I've been contacted by a load of creches by the way in my area over the last week, you know about one and I want to thank you for agreeing to meet some of them, but just to give you an example, two parents both earning €30,000 each, they pay rent by the way of €1,350 and they think they're doing well at that, they were paying €1,100 a month because of changes demanded by TUSLA, that's now gone up to €1,250 and if the insurance costs then add to that, they are in very serious trouble, right? The one I was talking to said two weeks into the month, they have nothing between their rent and their money for childcare, they have absolutely nothing left. So we need to do something and that means increased subsidies and I would say a not-for-profit insurance entity to be set up by the state to provide reasonable insurance for childcare providers. Thank you, deputies. Thank you. Thank you. The cost of insurance for the childcare sector has come into strong focus in the past few weeks. This has arisen following the withdrawal of an insurance provider from the Irish market and the confirmation that another could not be found. It is undoubtedly causing distress to providers and worry to parents. And I acknowledge that there are many providers who are facing increased cost, insurance costs. Until recently, there were two insurance underwriters offering insurance to the childcare sector in Ireland. On the 6th of December, one of those, Ironshore, notified their 1,300 clients that they would be withdrawing from the market. On the 17th of December, Patrick Smith, the broker who had provided the Ironshore underwriting services, informed their customers that they had failed to get a new underwriter to take over their client base. This leaves only one underwriter currently offering insurance to the sector alliance. The government is limited in what it can do in this situation. It cannot compel a private business to remain in the market nor can it directly intervene in the pricing of insurance offered to childcare providers. However, officials in my department are working hard to find a way to support those services that have been impacted. We have engaged with Allianz, whom I understand have confirmed that they will offer quotes to all but the most high risk services. Allianz, through the broker Arakas, are willing to consider quotes for all affected services. Quotes are being processed within 24 hours in the vast majority of cases. Some 1,100 quotes have been issued by midday today to provide Ironshore clients. This leaves 200 providers who have not yet received quotes and I will receive an update on this tomorrow and it will be made available. There may be a very small number of very high risk services which will not receive quotations. The press has reported that some providers are reporting significant increases in premiums and I understand that the premiums charged by Ironshore were considerably lower than the market average and this is leading to the increases. I also understand that the average cost of Allianz insurance for full time childcare is 60 euros per child. The average cost for sessional services such as ECI is 25 euros per year per child and that this equates to 0.5% to 0.75% of the turnover of a service. I understand that the increase is causing difficulties for providers. My department and city and county childcare committees are offering a number of supports for providers including a case management system for services experiencing sustainability difficulties. For community providers who are one in four of all our child care providers financial supports can be made available after an assessment through a process managed by the childcare committees in public. I would encourage services to contact their local childcare committee to access a range of supports including advice or business planning. With regard to the issue of insurance I'm liaising with my colleague the Minister for Finance to consider a review of insurance in the childcare sector as part of the ongoing independent review of costs in the sector. Consequently we need to make the market more attractive to both existing insurers and new entrants in order to increase competition which in turn should lead to a reduction in pricing and an increase in capacity. For the childcare sector this includes compliance with regulations. Compliance helps to manage risk. Managing risk is important for children and should also make the childcare facilities safer places. I agree with the CEO of Tusla when he says that the childcare sector is largely compliant. But I'm glad that I am in a position to make a once-off payment averaging 1,500 euros to providers to reflect their commitment especially in a difficult year. This is under the program support payment I established in 2017 to recognize their administrative burden. This will come the support will come from existing resources which are available to me in 2019 and payments will be made by December 28th. The range of payments will be from small amounts right up to 26,000 euros for very large providers depending on the number of children being cared for. It's a fast-moving situation but I am committed to supporting the sector appropriately and above all protecting the children. The insurance industry they are rip-off merchants. That's what we've learned from the central bank right. Some of us have been saying that for quite a long time by the way the government said oh it's all fraudulent claims and it's this risk and it's this that. They're rip-off merchants and we cannot trust, we can't allow the fate of childcare to be dictated by rip-off merchants. So we need a not-for-profit insurance entity. That's not radical socialism by the way. In Canada they've done this in motor insurance. Because motor insurance premiums are going through the roof the state set up not-for-profit insurance entities. Now it seems to me childcare and other sectors for that matter we should have that. Secondly, we have to ensure administrative costs, insurance costs and other costs are not passed on to already unaffordable levels of childcare. My area is the highest in the country but they're unaffordable everywhere. And the couple I mentioned there, how are they supposed to manage? And the national childcare scheme will only give them 20 euro a week. I made this point to you last week. That's from your calculator on your website. From your calculator. That's the average earning. 20 a week against that. In relation to other issues and Deputy Ravis called for an Oireachtas helpline. Yes, I think we need to get that set up so that you would have access to us because it's a fast-moving situation. We are having more information coming in particularly in relation to seeing that we can ensure that there are insurance quotes offered to as many as possible creches. My overall objective, of course, is that there isn't any closure. That's my overall objective. And what I have done, we've done some things in the very short term. One of them has to do with in terms of providing a program support payment on average 1,500 euros. We will put out how that's determined, but the formula in terms of how that's determined for each creche is the same formula we used in the past for program support payments. And it has to do with the numbers of children and whether they're in full-time or part-time. And so it's different from, you know, a smaller creche, larger creche and those factors. But the payment will be made. They don't have to do any more administration in order to get it. And it will be made by December 28th. Secondly, in terms of ensuring that things will not close, we also have that. I've identified that sustainability service that PUBL also offers and that is part of that. And certainly for not-for-profit that there potentially is there additional funding. So in relation to Deputy Boyd Barrett, I'm hopeful in that regard that because we are doing these kinds of things in order to support the providers now, it's been a difficult year that with the rises of costs across the board, insurance being part of them, that we can maintain that the fees will not escalate. Obviously, we need to look at that too. I fully accept that. In relation to your question or point, and I think Deputy Collins as well, that are there other kinds of models of insurance provision for not-for-profit in other jurisdictions? Thank you, Minister. I take those points and I'm going to feed that in. Obviously, you know, largely the work on insurance and moving forward happens in the finance ministry. But we are also getting, we are looking for, and I explained, looking for more data, particularly in terms of the way the insurance premiums are rising. We're going to get that data now in the new year, feeding it in and engaging with our colleagues. And that maybe there is a better way for our sector as compared with others. Thank you. We move on to- We move on to- Mongre.