Mr. Seamus McCarthy:

The 2017 appropriation account for Vote 40 - Children and Youth Affairs records gross expenditure of €1.25 billion. This represented an increase of almost 15% on the 2016 expenditure level of €1.09 billion. The account is presented under three output programmes, as indicated in the diagram which is now on screen for Deputies to see. The largest area of spending is the child and family support programme, at €740 million in 2017. The bulk of this expenditure is accounted for by funding of €713 million provided for Tusla and just under €24 million in respect of Oberstown Children Detention Campus.

A range of sectoral programmes for children and young people make up programme B, where most of the increase in voted spending was concentrated. The accounts record programme spending of €488 million in 2017, with the early childhood care and education preschool scheme accounting for just under €300 million of that expenditure. Much of the spending under programme B is channelled to the beneficiaries through Pobal which acts as paying agent for the Department under a service level agreement. Note 6.2 records the amounts paid through Pobal under each subhead.

The final Vote programme, comprising policy and legislation related spending, is much smaller in scale, at a cost of just over €22 million or less than 2% of the total spend in 2017. It included recurrent funding for the Adoption Authority of Ireland, the Office of the Ombudsman for Children and the ongoing Commission of Investigation into Mother and Baby Homes.

The surplus for surrender at the end of the year was €58.7 million. I issued a clear audit opinion on the appropriation account.

Dr. Fergal Lynch:

I thank the Chairman for giving me the opportunity to meet the committee to present on the 2017 appropriation account for Vote 40 – Children and Youth Affairs. In my opening statement I will give a brief overview of the main features of the Vote. I hope the more detailed briefing material supplied in advance of the meeting was of assistance to the committee in providing a fuller picture of the work of the Department and its expenditure.

The total gross provision for the Vote in 2017 was €1.311 billion, representing an increase of €173 million, or 15%, on the provision for the previous year. Nearly all of the Department’s expenditure is related to current funding for programmes and services. Capital funding makes up just under 2% of the total Vote.

Our central mission as a Department is to work to achieve better outcomes and brighter futures for all children and young people in Ireland. Among our key objectives are to ensure an effective child welfare and protection system; a high quality childcare system that is affordable and accessible; and an evidence-based approach to policy that helps children and young people to participate in decisions that affect their lives. We support both preventive and early intervention services, as well as direct involvement in the lives of children, young people and families, where necessary. We aim to collaborate with Departments, agencies and sectors to place children and young people at the heart of what we do. We place great emphasis on consulting widely and using available evidence to inform the development of policy. This involves the participation and collaboration of children, young people and other stakeholders. We also stress value for money and evaluation from the early stages in planning projects. Increasingly, our work involves dealing with significant legacy issues spanning many decades, while also trying to strengthen services for the children of today and planning the services of the future.

In terms of the overall composition of the Vote, 54% of gross expenditure in 2017 was allocated to the work and services of Tusla, the Child and Family Agency, while 35% was accounted for by childcare supports, which we now describe as early learning and care, and school age childcare. The remaining 11% of the Vote encompassed a variety of other programmes, including three other agencies - the Adoption Authority of Ireland, Oberstown Children Detention Campus and the Office of the Ombudsman for Children. The Vote also includes the funding for the Commission of Investigation into Mother and Baby Homes.

The Department has had an extensive agenda of work. In 2017 the major actions included commencing mandatory reporting as a legal requirement under the Children First Act 2015; implementing significant improvements to childcare supports in advance of the statutory national childcare scheme, which is due to commence later this year; ending the detention of children in adult prisons; commencing the Adoption (Amendment) Act 2017, which gave effect to the constitutional amendment on children's rights; publishing legislative proposals for the reform of the guardian ad litemsystem, the Bill for which will be published soon; introducing a new bail supervision scheme, which has helped to reduce the number of children being detained; and working closely with Tusla on a range of child protection and welfare measures.

We continued this work into 2018 and up to the present day. Among the major actions are building on our work with Tusla on child welfare and protection measures, including a co-ordinated response to the special HIQA report commissioned by the Minister for Children and Youth Affairs and supporting the full roll-out of the national childcare information system; working closely with other Departments on child protection issues, particularly on policy and operations involving An Garda Síochána and Tusla; sponsoring the passage of the Childcare Support Act 2018 and continuing a major programme of work for the forthcoming national childcare scheme; continuing implementation of the access and inclusion model to help children with special needs to take part in the ECCE programme; increasing the ECCE scheme to two years, doubling the number of children accessing subsidies and doubling the number of childcare places across all age ranges; publishing a major strategy for early childhood entitled, First 5 - a Whole of Government Strategy for Babies, Young Children and their Families; publishing the first ever LGBTI+ youth strategy; completing the transition of the ABC programme to Tusla's prevention, partnership and family support services; developing a programme of action to deal sensitively with the burial of human remains at the site of the former mother and baby home in Tuam; working to deal with the emergence of evidence of illegal registration of births; and continuing a programme for streamlining the system of funding for youth services.

These actions are just part of the major programme of work that the Department engaged in during 2017 and since then.

We are very aware that we face a number of serious challenges which we have been working to address in conjunction with relevant agencies. In the case of Tusla we are engaging closely on issues such as recruitment of sufficient social workers and addressing unallocated cases. We have also had a close involvement in the expert advisory group to support implementation of recent recommendations of the Health Information and Quality Authority, HIQA. We have been working intensively with Pobal on a major reform of governance and compliance procedures to ensure that childcare schemes meet today's requirements. This is part of the major task of making early learning and care and school age childcare services affordable, accessible and of high quality. The Department continues to work on a number of other important issues including reform of our youth funding schemes, which is under way. We are in the process of replacing the current targeted schemes, which are the product of many years' history, with a single scheme aimed at best meeting the needs of disadvantaged and vulnerable young people.

I believe that the Department of Children and Youth Affairs has made a positive impact since its establishment in 2011, particularly in the areas of child welfare and protection, affordable and quality child care supports and collaboration across sectors to advance the well-being of children and young people, but of course much more remains to be done. My colleagues and I will be happy to answer the committee's questions.

Shane Cassells (Meath West, Fianna Fail)
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I thank the Accounting Officer. I welcome him and his team. As attested by the opening statement, the Department has a huge scope, with many areas that could be examined. I will keep my focus tight this morning. Primarily, I wish to focus on the fact that the Department of Children and Youth Affairs advances a huge amount of money to an organisation called Pobal to administer its early years childcare programme; some €500 million in fact. Around a decade ago I remember the journalist Mr. Kevin Myers writing an opinion piece in The Irish Independentin which he tried to dig down into the world of quangos in this country. The one that confused him the most was Pobal. I will never forget his opening paragraph. A journalist's opening paragraph should always capture the imagination and attention of the reader. He asked the readers of The Irish Independentif they had ever heard of Pobal. He followed up by saying that they probably had not, but they should have because the organisation had a very significant budget. He then asked what exactly it did. Perhaps the only person reading back then who would have known the answer was the Comptroller and Auditor General.

Prior to coming here this morning I have been contacted by many community childcare providers. They know what Pobal is. Following the so-called forensic audit, these hard-pressed childcare providers are being told by the watchdog that they owe money due to supposedly having received overpayments. I would like to have something explained to me. Why did the watchdog, that is, Pobal, which is in receipt of €500 million of taxpayers' money, only really start to do these so-called forensic audits of community childcare services in the last year of the programme? The programme has been in existence since 2008. What monitoring practices have actually existed for the last decade? Second, what is the estimated total loss to the Exchequer in the last decade as a result of this lack of adequate checks on payments by Pobal? What is the process for recoupment?

Dr. Fergal Lynch:

First, I will add some context. Pobal is a registered charity and operates under the aegis of the Department of Community and Rural Development. It organises a range of services. The Department of Children and Youth Affairs is Pobal's biggest customer, with €500 million of childcare funding routed through it as the Deputy noted. Pobal organises all of the schemes for us and it also carries out compliance work. It has done compliance visits for many years. The Deputy referred to 2008. The compliance components Pobal was looking at in the early years concerned ensuring that parents were getting a service, the money from the public purse was being allocated to them and fees were not being raised.

Expenditure on childcare schemes has increased very significantly over the past several years. Our concern has always been to ensure good value for money for the Exchequer. However in the earlier years, up to 2015 or 2016, the money was granted on the basis of enrolments and registration. Once enrolments and registration were demonstrated, that was it. In later years the rules changed to be based on attendances. Therefore in more recent years Pobal has rightly been asking questions about the actual attendance numbers of children at these centres as opposed to enrolments and registrations.

With respect, I do not agree that Pobal has only started forensic audits in the last year. We have certainly asked Pobal to engage in a good deal of work in this space during the last several years, and it has done so. Pobal has identified excessive claims or overpayments in various years. However, because the rules of the scheme changed in the last few years to become much more specifically focused on attendance requirements, it is only in the last two years that we have been able to either recover money where it has been overpaid or make sure it is not paid in the first place. This has been made clear to the agencies involved. The role of Pobal has changed somewhat over the years. I can say more abut it if the committee wishes, but-----

Shane Cassells (Meath West, Fianna Fail)
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I asked specifically what has been lost to the Exchequer. I will come back to what Dr. Lynch has said. I appreciate his answer. Pobal has been asleep at the wheel. Dr. Lynch referred to what was done in previous years. Many different types of checks were going on. There were checks on headcounts, audits and checks on childcare. Meanwhile there were different checks on social economy and never the twain did meet. That was part of the problem. What does Dr. Lynch think has been lost to the Exchequer during the past decade? I contend that Pobal was asleep at the wheel.

Dr. Fergal Lynch:

We must base any amount potentially lost to the Exchequer on the rules. The rules of the scheme were based on registrations and enrolments in earlier years. This is an important point. When we started examining whether there a case for recouping money, as recently as 2015 and 2016, we got legal advice on several cases. The advice was that there was no such case because the rules were not sufficiently clear on attendance requirements. These payments could not be recouped. I can give the Deputy very specific figures on what Pobal has sought to recoup over the last few years. In 2017 and 2018 Pobal's compliance visits produced an estimate of approximately €937,000. There are caveats here because of the type of data involved. In the current year, 2018 and 2019, Pobal has identified potential excess claims of €4.7 million. I stress the word "potential".

In each of these cases, the money is not lost to the Exchequer. It is either recouped through subsequent reductions or required to be submitted before the over-claim payment is made. In some instances, providers were entitled to claim under a different scheme, that is, the community childcare subvention private, CCSP, scheme as opposed to the community childcare subvention, CCS, scheme, so it would not be payable. The amounts identified in more recent years were recoupable or were not overpaid in the first instance.

Shane Cassells (Meath West, Fianna Fail)
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I know that but what is annoying some people in the community sector is that they are being penalised because of the practices that were allowed to happen. Its members are being penalised for €10,000 on average and they cannot afford it. If the practices had not been allowed to develop over that period, they would not be hit in this way. Has the Department penalised Pobal in any way for the fact that the practices were allowed to go undetected for a decade? Can this committee be satisfied that the reporting between Pobal and the Department is now sufficiently robust?

Dr. Fergal Lynch:

I believe that it is. We have regular conversations with Pobal as to how it implements its compliance requirement. Pobal can only assess against the agreed rules and I believe it has done that. The Deputy stated that individual small providers had suffered a loss of around €10,000 as a result of this. I appreciate that this would make a difference to them. Pobal is very careful not to grab the money from them and it has a very good case management and sustainability system. Instead of just asking a provider for the money back, it works with providers, particularly if it is clear that they will run into financial difficulty or will have sustainability issues as a result of being required to repay, or not being allowed to reclaim, money.

Shane Cassells (Meath West, Fianna Fail)
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The surpluses and underspends in the Department stun me greatly as this is a massively underfunded sector. The average cost to parents in a commuter county such as my own are €1,000 per month, which is the cost of a mortgage. A surplus of €48 million was surrendered in 2016 and it was €59 million in 2017. This sector has been on the front pages of the newspapers recently. For example, a headline in the Irish Independenta couple of weeks ago referred to a projected €50 million black hole in the Government's new childcare scheme. As the Minister for Children and Youth Affairs, Deputy Katherine Zappone, stated, "To cut to the chase an additional €50 million would be needed to deliver the first full year of our new scheme in 2020. This is just the bottom line." How are we squaring the circle here? There were returns of surpluses of €59 million in 2017 but the Minister is looking at a €50 million black hole for 2020. Has that €50 million been secured?

Dr. Fergal Lynch:

The €50 million to which the Minister referred is the carry-forward costs of the new national childcare scheme for 2020, which will be dealt with as part of the normal Estimates process.

Shane Cassells (Meath West, Fianna Fail)
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How does Dr. Lynch link that to the underspends?

Dr. Fergal Lynch:

An underspend such as the one in 2017 is always frustrating and annoying for the people involved. There were good reasons for it, though. The concentration of the underspend was in the early years sector, with €52.8 million of the total in that area. We have been building ECCE to a second year and we have introduced a new access and inclusion model, AIM. We tried to increase the uptake of some of the targeted schemes and, while we were unsuccessful at first, we were ultimately successful. The result was that, at the beginning of 2017, we made provision for what we believed would be the requirement for that year. In the event, ECCE funding was not required to the extent we had envisaged. This was because we were expanding the scheme and offered, for the first time, three payment points, in January, April and September. The September uptake was good but the April uptake was about half of what we had expected. When one is expanding a scheme, it is difficult to accurately predict the uptake and in may cases parents decided not to start their children in childcare schemes in April.

Shane Cassells (Meath West, Fianna Fail)
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Provision had been made for some 15,500 enrolments in April.

Dr. Fergal Lynch:

Correct.

Shane Cassells (Meath West, Fianna Fail)
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Only 8,400 took their places. The Irish Independent, on its front page on 20 May, referred to a new crisis in childcare because crèches are turning babies away. There is a severe shortage of crèche places for babies and toddlers because of the success of the free preschool programme for three to five year olds but Teresa Heaney, the chief executive of Early Childhood Ireland, stated, "The second preschool year cannibalised places for younger children". The Department has acknowledged the pressures and the capacity problems but mums and dads cannot find places for children, which is having an impact on mums and dads returning to the workplace. This is a hugely significant issue and it is kicked around at election time by people who do not understand the nuances of what is happening. It is having a detrimental effect, which feeds into the exorbitant costs which people are facing. It is almost a premium thing to get a child into an available place, before we even get into the issue of quality.

Dr. Fergal Lynch:

We have worked very hard to increase the number of places and, in four years, the total number has increased from 103,000 to 213,000. We are encouraging this by including capital grants to support it and the private sector is also involved. Availability in different regions and for different age groups is a factor too and we are working hard with providers and Pobal to assist as much as we can. The underspends in 2017, while unsatisfactory and frustrating for everybody, were completely reversed in 2018 when we had a full outturn of expenditure and a full uptake of the schemes throughout the system. We expect the same in 2019.

Shane Cassells (Meath West, Fianna Fail)
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I have asked questions of the Minister in the Dáil about the exceptionally low pay of people within the sector, who are on €11.93 per hour which is 3 cent above the living wage. There have been numerous protests outside the doors of the Dáil by the many thousands of people who work in the early years sector. The stock answer is that the childcare providers are private entities but they are implementing State programmes, something which is not stated in the Dáil. The entire system would collapse without their co-operation and collaboration with the Department but the staff are grossly underpaid. What is Dr. Lynch's assessment of that point? These people work amazingly long hours. Teachers in private school enterprises are paid by the Department of Education and Skills. Should the people working in the early years sector not similarly come under the auspices of the Department of Children and Youth Affairs? The Big Start campaign is on behalf of these people, who are not being paid anywhere near what they deserve, considering the qualifications they need and the expectations of parents for the delivery of a quality education in the sector.

Dr. Fergal Lynch:

I have huge sympathy for the sector and a very high regard for what these people do, because they do extremely important work.

We have raised the level of training and qualifications but the work that they do absolutely needs to be acknowledged. I know it is almost a cliché at this stage to say that we are not the employers. That is not us stepping back and saying-----

Shane Cassells (Meath West, Fianna Fail)
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Does Dr. Lynch take my point that he was asking these sectors to implement State programmes across the board?

Dr. Fergal Lynch:

I absolutely take that point. Since we are not the direct employers, we cannot directly influence pay but we increased the capitation rate paid to providers by 7% last September. We have tried to make the sector overall as sustainable as possible. We took the relatively unusual step of what we call non-contact time or programme support payments for the sector. We paid €19.4 million in the current year to assist providers because, as they will always say, this is not an area in which it is easy to cover costs and make any sort of return. The Minister has said a couple of times that she would support a sectoral employment order which the providers could organise. I understand that a number of the workforce are organising in that direction. In the longer term, I am very conscious that because we are not the employer, we cannot do the sort of thing that we might do if we were the employer. In the long term, we are developing a workforce development plan for the future of the sector.

Another important thing that we put into First 5, which was the strategy for children and young babies, is a new funding model. We are seeking to develop a new funding model which will create the right incentives for the sector as a whole, including paying the workforce more. I am not saying for a moment that there is a quick fix for this or that we can do something overnight. We also have to be careful that increasing capitation payments does not simply get passed on in increased charges to parents. We are treading a fine line. We are doing as much as we can and we are working with the sector.

Shane Cassells (Meath West, Fianna Fail)
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The sector is facing substantial challenges with the changes to ratios too, which will have an impact on the requirement for the recruitment of additional staff, which increases the cost to the provider, which will eventually be passed on to the parents. This is all part of the knock-on effect of that. When we had the Department of Health here, I asked about a matter, and I want to ask the Department of Children and Youth Affairs too since it is also a part of this. Money was lost when moving the offices from Mespil Road to Miesian Plaza. There was a delay in the Department of Children and Youth Affairs occupying the premises, with an extension to the lease at Mespil Road that cost €1.5 million instead of moving to Miesian Plaza. The move was delayed, as noted in the report, because the move of assistant principal officers to the pod-style system was deemed a significant cultural change. I asked the Department of Health that question and want to ask Dr. Lynch too. Does he think that the €1.5 million that was effectively lost to the taxpayer because there was a cultural change experienced by Department officials, moving up the road from Mespil Road to Miesian Plaza, is acceptable?

Dr. Fergal Lynch:

I will deal with the earlier point that the Deputy made about staffing and then address Miesian Plaza, if that is okay. With regard to staffing, there has been some criticism in the school-age childcare area of the new ratio of 12:1. I stress that the ratio was recommended by an expert group of stakeholders in the area. As I recall, they argued for 11:1 rather than 12:1. Some 85% of the 400 services that have registered already reach that requirement. In other words, while people said that we would never be able to afford it or achieve this, 85% of the school-age childcare services are already meeting that. The other 15% do not. I have some questions in my mind about claims that this will substantially increase their cost, which I will put to them. The Deputy quite rightly referred to pay for workers in the sector being at an average of €11.93 an hour. If one requires one member of staff per 12 children, even if the charge per hour is €5, that would be €60 compared to a €12 cost for employment. I think a ratio of 12:1 is good for children and for the system but I do not see how that would create the sort of financial difficulties described.

Shane Cassells (Meath West, Fianna Fail)
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That is fine. I want to address the Miesian Plaza matter. There are a myriad things that are balanced on a fine line. It is not one matter in isolation. Another issue is that providers are subjected to rates. I have consistently argued with the Minister about that. It is about trying to bring down the cost base for many providers, because their margins are so tight, which Dr. Lynch knows very well. There are a myriad things.

Dr. Fergal Lynch:

I accept that there are a myriad things. The Minister's view on rates is on record. The move to Miesian Plaza was difficult. There is no doubt about that. We all worked very hard to move as quickly as we could. It is no consolation to the Deputy to say that the €1.5 million did not come from the Department of Children and Youth Affairs' Vote but from the Office of Public Works' Vote. I am not saying that makes it okay.

Shane Cassells (Meath West, Fianna Fail)
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It comes out of the pocket of the people.

Dr. Fergal Lynch:

It comes out of the public pocket. I think it was a difficult situation where people were being moved. I was disappointed to see some of the public coverage where there was a claim that assistant principal officers in either Department were in some way delaying this. The practical realities related to logistics, designs, availability of the fit-out and so on, rather than assistant principal officers or any other grade deliberately delaying the move. We were ready to move. We were the first to move, on 21 May, over the space of a single weekend. We did not lose a day or even an hour's worth of our work. We did a lift and shift over the weekend and were back up and running on the Monday morning.

Shane Cassells (Meath West, Fianna Fail)
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I did not say that anyone lost any work. The OPW and the Department of Housing, Planning and Local Government attended the committee to address this last year. Millions were lost in leases on both sides because of the delay in that move, which was significant.

Dr. Fergal Lynch:

We did our utmost to work with the OPW to move as rapidly as we could and we were the first in.

Alan Farrell (Dublin Fingal, Fine Gael)
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I welcome the witnesses. They will be glad to hear that despite their loitering outside the door, they will be taking a break soon enough because of divisions in the Dáil. The Department has been given a clear audit opinion although there are a few queries that I would like to highlight. As the Chairman mentioned, I am Chair of the Committee on Children and Youth Affairs, so much of this is known to me, given that I took over the role in July 2016. Deputy Cassells has covered much of the ground relating to Pobal. I have raised issues about Pobal in the past with regard to its role, the integration into the Department of Children and Youth Affairs and why it is an advantageous arrangement to use it in the first instance. That being said, Deputy Cassells has covered overpayments and recoupments but Dr. Lynch may wish to make an observation with regard to my comment.

With regard to a disclosure by the Accounting Officer about an internal financial control issue relating to education and training boards, ETBs, I appreciate that somebody pressed a button and inadvertently transferred five times the value of what should have been passed across to an ETB. I appreciate that it was caught and returned but the process and manner in which €2.47 million was paid in error instead of €600,000 is a bit alarming, to say the least. I appreciate that it was caught and the improvements that were made to ensure that it does not happen again. Will Dr. Lynch refer to those improvements?

Dr. Lynch mentioned the Department's building, which is a fine facility.

Is the Department renting or leasing it? I have asked this question before. If the Department is renting or leasing, does it result in more value for taxpayers' money than an outright purchase?

I have a question for Mr. Smyth on an issue that dates back a few years and that I have raised in the past. It relates to petty cash. Has there been a conclusion, be it a prosecution or otherwise, in terms of the petty cash that was highlighted in the audit?

Dr. Fergal Lynch:

That is actually a matter for the Department. I will deal with it.

Alan Farrell (Dublin Fingal, Fine Gael)
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Is it the Department? I apologise to Mr. Smyth because I was of the view that it pertained to Tusla. Has the matter been resolved satisfactorily? Is there anything to be learned from the process? Our guests may start their responses and then I will contribute again.

Dr. Fergal Lynch:

I will deal with the questions in order, if I may. With regard to Pobal, we have regularly questioned the most appropriate way of delivering the services. Ours is a relatively small Department, even though it has grown. We had a major policy decision to make as to how to run the schemes. In recent years, for the moment at least, we have decided that the best way to do so is through Pobal, which provides a good service. We have a strong governance arrangement with it. In the context of administration costs relative to others, we have looked into the matter and are clear that the administration costs are good. Pobal is a non-profit organisation. We believe the administrative costs that it incurs are reasonable. Obviously, we push very strongly each year in terms of the amount of money we would pay the organisation to operate the schemes for us.

We are planning, in the next year or less, to have a major review and analysis of our schemes and how we run and deliver the early-years schemes. As has been pointed out, the expenditure in this area now accounts for nearly 40% of the Department's Vote, certainly 35%. There are questions to be asked in this regard. For example, should the work be done by another State agency? Should it all be run by Tusla? Should there be a separate entity altogether? Should the work be taken into the Department, and so on? We will be considering this and of the role of the community childcare schemes and of anyone involved in delivery in that regard. We would like to get it right. Obviously, we are focused on other things at the moment, particularly the national childcare scheme.

Alan Farrell (Dublin Fingal, Fine Gael)
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I understand.

Dr. Fergal Lynch:

On the ETB process, without a doubt the error that occurred was unfortunate. It was picked up, fortunately. I, for one, am now reasonably satisfied that it would be even less likely to happen in the future.

Alan Farrell (Dublin Fingal, Fine Gael)
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How quickly was it was picked up?

Mr. Gerard Hughes:

I will answer that one. It was picked up in the ETB on receipt. It was also picked up within the Department that afternoon. It was nearly instantaneous. The phone call was received back to say we got so much, and at the same time we were about to call the ETB.

Dr. Fergal Lynch:

Whether the sum is €1 or €10,000, it is the principle that matters. It is a question of making absolutely sure that our systems are right.

The Deputy inquired about the building. The OPW rents the building. It is under that organisation.

The petty cash issue was of concern to us because it revealed that we failed to keep good records. It was extremely unsatisfactory. It meant that, while we are satisfied there is no suggestion of fraud in this particular case, there was a situation in which we did not have sufficiently good records to confidently state that this amount of money was accounted for, even though we believe that it has and have no reason to believe otherwise. We have radically reduced the amount of cash we use. In those days, it was to do with youth payments. In the early days, there would have been perhaps €20,000 or €30,000 on hand. We now have virtually nothing. We have reduced what we would have had on hand by something like 97%. We use almost no cash at this stage.

Alan Farrell (Dublin Fingal, Fine Gael)
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With regard to the honesty box issue, which is separate from the petty cash issue, I understand it was subject to an investigation by An Garda Síochána. Is that matter concluded?

Dr. Fergal Lynch:

I have not heard anything in recent times about it. Mr. Hughes might be able to answer that.

Mr. Gerard Hughes:

The Garda Síochána has concluded that it can go no further with it. In what it looked into, it found no culpability. Based on the evidence it has taken from people, it is going no further. The investigation is closed.

Alan Farrell (Dublin Fingal, Fine Gael)
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That is regrettable under the circumstances given the outcome.

I will talk very briefly about procurement before I move on to Oberstown. From my experience, I have no doubt that every single Department and body that has appeared before this committee over many years has had procurement issues, overruns, underestimations, instances of non-compliance with procurement rules, instances of not advertising in the appropriate journals, etc. I am not going to refer specifically to any issues that are highlighted. As a new Department only in existence since 2011, with its wealth of collective knowledge and examples of other Departments repeatedly not having proper information trails concerning the procurement of goods and services, the Department of Children and Youth Affairs should take a really deep look at how it and its agencies operate and procure goods and services. I highlighted this last year at a meeting of the Select Committee on Children and Youth Affairs. It is really important, particularly for a new Department, to be able to stand up and say there are issues pertaining only to small contracts, as in forgetting to put the cleaning contract out to tender, rather than something bigger. It is a matter of credibility at meetings of this committee and the Select Committee on Children and Youth Affairs.

I wish to move on to the subject of Oberstown. In fairness to Deputy Cassells, he covered a lot of the ground highlighted to us, and did so very well. When I took over the chairmanship of the children's committee, I visited Oberstown. This, of course, goes to the capital-----

Alan Farrell (Dublin Fingal, Fine Gael)
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Oberstown is located in a rural area near Lusk in north County Dublin. The town has a population of 10,000. It is a large town by the Chairman's standards. It is approximately 10 km north of Swords, so it is perhaps 12 km or 13 km north of Dublin Airport. It is a very rural location, although it is very well served by a former national road that would get one there pretty quickly.

One of the issues I experienced when I went to Oberstown was that there was a requirement to rethink the entire building because none of the doors was of the same size. The frames were all of different sizes. The locks were all different. It was the most bizarre experience. I had served on the justice committee for six years and visited prisons as a member of that committee. I appreciate Oberstown is not a prison but if a judge sends an individual to Oberstown and he or she does not want to go there, the door needs to be locked. Therefore, it seems pretty logical that the Prison Service should be talked to about how to proceed. Clearly, that did not happen and the Department then had to cough up to retrofit and make uniform the doors, locks and many other things. To my shock and horror, I was passing a door on a secure corridor and I looked outside to discover a long, thick chunk of wood jammed between a wall and a door.

That was the security. It has been repaired since but the point is that this basic error of judgement was made in the plan, which takes me back to the expenditure. There was an underspend on the overall project, which I would like Dr. Lynch to explain.

On the uniformity of locks and doors and the security for the personnel working in Oberstown Children Detention Campus, which should be of paramount importance to all of us, what improvements will be made in the long term?

Dr. Fergal Lynch:

I might deal with the Oberstown issue first and then go back to the procurement. On the issue of Oberstown Children Detention Campus, it was an extremely unsatisfactory experience. However, I know that a huge amount of planning and testing went into it because I spoke to the people involved. Mock-ups of rooms were tested, including the particular doors the Deputy referred to, by people who believed they met the required specification. Our adviser travelled to similar facilities for children in other countries to look at the most recent designs and that influenced the type of fit-out that was accorded to the Oberstown campus. Everybody who knew anything about this on the technical side signed up to it. The request for tender, RFT, was agreed for the specifications for the doors, etc., yet I agree with the Deputy - I was there on a number of occasions - that at the end, it could be seen that if they so wished, the young people there were able to severely damage the doors from the inside, causing serious potential harm to themselves, let alone the issue of security. It was extremely unsatisfactory.

Another issue that the Deputy has referred to is that for reasons I do not entirely understand, the door frames were not built on a uniform basis. When doors had to be changed, therefore, they had to be custom made, etc.

Alan Farrell (Dublin Fingal, Fine Gael)
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All the doors and frames were different sizes.

Dr. Fergal Lynch:

I found it extraordinary and I do not know why. They were extremely unsatisfactory issues. In the end, after toing and froing, these matters were put right and now we have a good facility. I share the Deputy's frustration with the length of time it took to get to that point, and we had to spend €775,000 replacing doors.

Alan Farrell (Dublin Fingal, Fine Gael)
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Was there any attempt on behalf of the Department to recoup any of that? Was it able to do so?

Dr. Fergal Lynch:

What happened was there was a negotiation with the providers, which covered that and a number of other areas. When the entire facility was being finished - and that happened over a period of time, as would be expected in a large programme of that kind - there were disputed amounts on both sides, and that was one of the disputed amounts that was included within it. Where the builders claimed their final amount, that was taken into account in the final settlement.

The Deputy referred to an underspend but I have not seen an underspend. Was he referring specifically to the capital cost?

Alan Farrell (Dublin Fingal, Fine Gael)
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Under A4, there is €2.1 million relating to-----

Mr. Seamus McCarthy:

The provision was €25.86 million and the spend was €23.74 million, so there was an underspend or a shortfall of €2.1 million. That is on page 16 of the appropriation accounts.

Dr. Fergal Lynch:

I will come back to the Deputy on that.

Mr. Gerard Hughes:

That was the year-on-year figure. It did not come in under the overall project; it was for that particular year and it was because of the timing with a number of issues on the capital side where negotiations were ongoing with BAM.

Dr. Fergal Lynch:

What the Deputy is looking at there is revenue or current money as well as capital money. Just to clarify, there was no underspend in the capital programme but the day-to-day spend-----

Alan Farrell (Dublin Fingal, Fine Gael)
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Before Dr. Lynch moves on, can we go back to the €775,000? I am not entirely sure what his answer was on that. There was a negotiated settlement. As a State, we expended €775,000 correcting a contractor's mistake. Is it established that it was the contractor's mistake?

Dr. Fergal Lynch:

As I understand it, yes. It was one of the factors that was taken into account in the settlement.

Alan Farrell (Dublin Fingal, Fine Gael)
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Did the State cover the €775,000?

Dr. Fergal Lynch:

When the Deputy asks if we covered it-----

Alan Farrell (Dublin Fingal, Fine Gael)
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Is Dr. Lynch confident as the Accounting Officer that the taxpayer got value for money?

Dr. Fergal Lynch:

I am confident that the settlement at the end of it, which took account of the €775,000 and a number of other factors, was appropriate.

Alan Farrell (Dublin Fingal, Fine Gael)
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I am sorry for interrupting.

Dr. Fergal Lynch:

I will move to the procurement issue the Deputy raised. I again agree with him that it is an area where Departments fall into difficulty. One of our internal audit reports, which is a good and valuable report for us, gave us a limited assurance rather than a reasonable assurance, which is the full extent, and that was last June. The criticisms were entirely valid and they were related to failing in certain circumstances to ensure that our contracts were on file or, in some of the earlier cases, and I stress that they were earlier, failing to have clear end dates or start dates. We now have a procurement unit to attend to all of this. We established a specific procurement unit within the Department, which has a centralised contract register that keeps all the supporting documentation and advises all of the units around the Department on procurement issues. I expect that the chances of fairly basic and small errors, which should not happen, happening now are greatly reduced since the establishment of a small but focused procurement unit within the Department.

Alan Farrell (Dublin Fingal, Fine Gael)
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I am pleased to hear that. I will move on because I am sure my time is limited at this stage. I refer to community childcare subvention, CCS, and community education training supports, CETS. I fully understand, appreciate and value what is being done and how it is being done. I wish we could treble it or quadruple the subvention and supports. The Department seems to be underestimating the numbers and Dr. Lynch referenced them in response to a number of questions from Deputy Cassells. It issue an issue and I am wondering about the shortfall in the registration of children in a variety of schemes. Did the Department improve this process following the audit? Is it not doing right with those estimations? Is it that the Department is not putting enough money in or is the mechanism for generating those estimations is incorrect? Is there an effect on the public purse as a result?

Dr. Fergal Lynch:

Those are important questions. It goes back to the factors leading to the underspend in 2017. There was a lower uptake than we projected for both CCS and CETS. One of the major reasons for that was practical. The subsidies we were paying at the time were relatively low, relative to the cost of childcare. For example, we were paying up to a maximum of €95 for one of the payments. We increased that to €145 for 2018 because we recognised the gap was not bridgeable. Similarly, we had a rate of €50 that we increased to €95. We recognised that the difficulty was a trap whereby the subsidy that we were pitching was not sufficient to provide support for people seeking to use the scheme. We addressed that and, by 2018, coverage had increased significantly and we were at the level that we predicted. If my memory serves me, in a relatively short number of years we have gone from approximately 25,000 to approximately 60,000 people being covered by those schemes. I would need to check the exact figures but it is of that order of magnitude.

We got there by 2018 but I fully accept that in 2017, we did not, and that was primarily for the reason I have described. We also engaged in a major communications campaign as part of what we called the September measures. These schemes will be amalgamated or abolished when we set up the national childcare scheme. They will form part of that in the future.

Alan Farrell (Dublin Fingal, Fine Gael)
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That is still in October.

Dr. Fergal Lynch:

We are working very hard on that. There is no doubt it is a challenging deadline but we are working intensively on it. We are well on schedule for most of it. The information technology, IT, component is always a challenge and we are working extremely hard on it.

Alan Farrell (Dublin Fingal, Fine Gael)
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We were all talking about the IT system a few years back. Forgive me as I have not read the note so I am not sure if it is included in that. Did we manage to achieve an on-budget delivery for that IT system build? What was the outlay in the end?

Dr. Fergal Lynch:

The IT system is still in the process of being built.

Alan Farrell (Dublin Fingal, Fine Gael)
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It is still being built. What is the outlay to this point?

Dr. Fergal Lynch:

It has proven to be more complex than we would have originally predicted. I will hold fire, if the Deputy does not mind, on specifying the exact likely final amount. We are pressing very hard for a value-for-money outcome. It will be an extremely good system in the way it will operate. For parents who can access the system online, in drawing together Revenue Commissioners and social protection data, it will be significantly easier than the current system.

Alan Farrell (Dublin Fingal, Fine Gael)
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I appreciate that the current system is not ideal. I thank the witness.

Catherine Murphy (Kildare North, Social Democrats)
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I will briefly ask about the early childhood sector and the viability of the type of income seen by the people who work there. I accept this may be a policy area. Has the Department done any work on the sectoral employment order as it would be necessary in order to produce budgetary responses?

Dr. Fergal Lynch:

I will ask Ms McNally to respond on that.

Ms Bernie McNally:

The Minister has said on a number of occasions that what the workforce earns is really important for children. Good quality care for children comes from a valued workforce, as we know from international evidence. The European Commission has told us that as well. That is why the Minister has been very vocal about a sectoral employment order. We work with the profession a lot and the Minister established a forum attended by representatives of different groups. Only the other day the Minister met representatives of SIPTU, the Irish Congress of Trade Unions, IBEC, etc. and matters like this are always discussed.

As the Secretary General mentioned - it may sound like a cliché - we are not the employer and we would not be a direct party at the Labour Court for discussions on a sectoral employment order, although we would be asked to make a contribution. If we were asked to make a contribution, we would say it is not good for children when there is 25% turnover in the sector because staff cannot be retained. We know from international evidence that it is not good for early childhood outcomes. We need to find a position where staff can be paid a reasonable amount and they can be retained and provide proper early education for children.

There is only so much we can do and the Minister and the Government have put much extra investment into the sector. All of this is not going to staff wages but we hope that measures like the extra 7% in early childhood care and education, ECCE, capitation last September will lead to an increase becoming evident this year. Everything the Department can do to support the sector is being done. We are hoping the new funding model mentioned by the Secretary General will allow us leverage the employers to pay their staff more. We are hoping this wonderful model that is to be built will lead to services perhaps opting in to extra funding on the condition they pay their staff a certain amount. That is in development but it will take a couple of years.

Catherine Murphy (Kildare North, Social Democrats)
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I thank Ms McNally for the reply but I remember this being established, mainly as Deputy Cassells and I participated in by-elections in 2005 and childcare was the key issue. It seemed to take policymakers by surprise that it was such a big issue. There was a grant of €1,000 given as a budget response and the late Mr. Brian Lenihan, as Minister of State with responsibility for children at the time, introduced the early childhood care and education scheme.

It was a challenge in its own right to get that up and running. It is still reasonably new but we can already see the value. For example, we do not see as many pictures of screaming children on their first day of school in September because there is a much easier evolution into the education system. There is a definite educational value that has already become evident. The people working in the sector do not feel valued and they are not being retained, despite many of them being educated to a very high standard. I will not labour the point but there would be budgetary implications if there is to be a sizable shift.

We focus on how money is being spent and the Department has less than it needs. Children and youth affairs are really important and there is a major underprovision in the youth area. Is the surplus that was surrendered a cause of concern? I would have expected that every shilling would be spent. That should be as much of a concern as overspends or procurement matters. Why was there a surrender of funding in 2016 and 2017? Was it a feature last year again and why does it happen?

Dr. Fergal Lynch:

I repeat that we found the surplus extremely frustrating and it certainly was a cause of concern. I had started but perhaps had not completed the explanation as to how that surplus arose. The examples arose across the ECCE, the access and inclusion model-----

Dr. Fergal Lynch:

It may be that I placed documents on top of it. I apologise as I placed a file on it. I was not deliberately covering it myself.

Dr. Fergal Lynch:

I was saying the surplus is certainly a cause of concern for us. The causes were primarily in the early years area, mainly in funding areas where we knew people needed a service, but it was not taken up in 2017 or 2016. It was taken up by 2018.

Catherine Murphy (Kildare North, Social Democrats)
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Was there flexibility to spend it in other areas?

Dr. Fergal Lynch:

We did not really have that flexibility for two reasons. Each year, the most important month for knowing how much money is to be spent is September; it is a September start date for most people. We did not have time to reallocate it as a result. We cannot simply vire or move money from one area to another without permission. It would have been a temporary understanding rather than being permanent.

Catherine Murphy (Kildare North, Social Democrats)
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It is welcome that there have been improvements in the ECCE scheme, particularly for children with special needs. The witness said there has been a doubling of numbers but has that come from a very low base? Do we know the need?

Dr. Fergal Lynch:

The figures I quoted earlier referred to 103,000 places in total. That is not just the ECCE scheme and I can dig out the separate ECCE figures. That figure increased to 230,000 places. The access and inclusion model, AIM, coverage is for children with a disability and the proportion of services, for example, that could offer an ECCE place to a child with a disability moved from 44% of services to 81% in three years between 2014 and 2017. That is an indication of the increase in availability of the service specifically for children with a disability.

Catherine Murphy (Kildare North, Social Democrats)
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Does that refer to physical buildings?

Dr. Fergal Lynch:

That refers to number of places.

Catherine Murphy (Kildare North, Social Democrats)
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Are there additional supports?

Dr. Fergal Lynch:

We offered additional supports through funding for each of these years. We started the AIM in 2016 and it continued into 2017 and 2018.

There were underspends in 2016 and 2017 because of the nature of the scheme. It was getting up and running and was also dependent on the early childhood care and education, ECCE, scheme, which is the mainstream scheme, but we reached and slightly exceeded that amount by 2018. We are fully up and running at this stage.

Catherine Murphy (Kildare North, Social Democrats)
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On Oberstown, is that facility fully occupied by detainees at this stage?

Dr. Fergal Lynch:

It is fully operational. It has more space if we need it. I would very much hope that we will not need it because we use the facility as a last resort. We have a bail supervision scheme which tries to reduce the need for children to end up in Oberstown. We have enough places there and it is operational.

Catherine Murphy (Kildare North, Social Democrats)
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My understanding is that there were a large number of contract staff in Oberstown. Is that still the case and is there a full complement of staff there?

Dr. Fergal Lynch:

We have a reasonable level of staffing for the purpose of providing the service to the number of children in the facility. We would run into difficulty if the courts were to start committing more children to the facility and we would then have to look for more staff. It is not easy to hire staff.

Catherine Murphy (Kildare North, Social Democrats)
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Is there a capacity to go back to the Department for that or would that impact on other services?

Dr. Fergal Lynch:

We would have to make a budget case for the purposes of taking on additional staff.

Catherine Murphy (Kildare North, Social Democrats)
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On an issue that may present a specific problem for the Department and Tusla, which a separate entity, does the Department have any pending claims under the State Claims Agency?

Dr. Fergal Lynch:

Is the Deputy referring to all areas?

Catherine Murphy (Kildare North, Social Democrats)
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Yes.

Dr. Fergal Lynch:

I would have to check that.

Catherine Murphy (Kildare North, Social Democrats)
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Can Dr. Lynch come back to us with that information, please?

Dr. Fergal Lynch:

Yes. I do not know the answer at the moment so I would have to check.

Catherine Murphy (Kildare North, Social Democrats)
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There is quite a sizeable increase in the budget but there was also a new service introduced. Was that fully funded out of that increase or did that impact on other services?

Dr. Fergal Lynch:

That was fully funded. The services I was referring to in the increased levels were specifically the access and inclusion model which was new from 2016. We doubled the ECCE provision by ultimately providing two years of a service. We started with 38 weeks. In the second year, as we were expanding, we went to an average of 61 weeks. In the third year, which was the full year, we had the full two-year provision. They were funded in each case.

Catherine Murphy (Kildare North, Social Democrats)
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When Dr. Lynch talks about the global funding that went to the Department, was that an increase across the board? The increase would have been accounted for by additional specific activities undertaken by the Department.

Dr. Fergal Lynch:

The increase was always for a very specific purpose. The major purpose was early years provision. For each of the years that I am looking back on from 2014 onwards, there was increased funding for Tusla for specific programmes. If memory serves, the increases tended to be between 4% and 5% per annum for Tusla services.

Catherine Murphy (Kildare North, Social Democrats)
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To move on, one of the issues I routinely come across is the lack of funding for youth services, which is an area that yields great benefits when proper investment is made. Is there an objective resource allocation model in place based on factors such as socio-economic circumstances, age and rural or urban location or is funding dependent on Pobal and which organisations are in a position to make an application for funding? How is this done? Is there any prospect of moving towards an objective resource allocation model? It strikes me that what we spend may not be spent in the right areas.

Dr. Fergal Lynch:

That is an extremely important question and one on which we have been working quite intensively. As to the Deputy's question on better or clearer resource allocation, the answer to that now is "Yes". Under our targeted youth funding scheme, which involves amalgamating four existing schemes, we are pulling them all together into a single scheme. We have introduced what is called an area profile, needs assessment and service requirement tool, which is a bit of a mouthful. In layperson's language this means that the educational and training boards, ETBs, carry out an assessment of need in their area. They identify where services are falling short, where services are reasonably well provided and where the actual needs are. In the future, from next year onwards, each ETB will be asked to draw up the service level requirement for its area based on this tool and organisations will then be entitled to apply for funding on the basis of this model. We did not have this model in place before.

Catherine Murphy (Kildare North, Social Democrats)
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Will this be through the ETBs?

Dr. Fergal Lynch:

Yes, it will be through the ETBs.

Catherine Murphy (Kildare North, Social Democrats)
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Will it be funded by the Department of Education and Skills?

Dr. Fergal Lynch:

No, it will that be funded by the Department of Children and Youth Affairs?

Catherine Murphy (Kildare North, Social Democrats)
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Funding of €60 million is provided to support the provision of youth services throughout the country, including services for young people at risk of disadvantage. This strikes me as a tiny amount of money in the context of the level of need. Has the Department done projections on what the needs are likely to be or will the services have to live within that budget?

Dr. Fergal Lynch:

We live within a specified budget. The Government obviously makes decisions about what to allocate and where to allocate it. When the decision is made as to how much money is going to be allocated to each particular area, including youth, then the proposals are drawn up within that. Otherwise there is a danger that there would be almost infinite applications and demands for services. This will be a step forward, however, because I have to acknowledge that the existing system, under which it is more or less a case of getting what one got last year plus or minus a few percent, is hardly scientific. It has the distinct disadvantage that if one was in a part of the country that does not happen to have a well developed youth service, one does not get any money.

Catherine Murphy (Kildare North, Social Democrats)
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That is precisely the experience of several of us who live in areas which have a rapidly growing population.

Dr. Fergal Lynch:

That is why the revised targeted youth scheme which we will have in place will be a significant step forward in that regard.

Catherine Murphy (Kildare North, Social Democrats)
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What we have seen to date is that what one has one holds. There is no flexibility to grow, even though an area may have a disproportionately large young population and problems may be presenting that it would be very cost-effective to deal with them and where one is dealing with young people at risk-----

Dr. Fergal Lynch:

That is precisely the issue that we want to deal with.

Catherine Murphy (Kildare North, Social Democrats)
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When are we likely to see that rolled out?

Dr. Fergal Lynch:

This is a transitional year and we are hoping that, probably from the middle of next year, we will move completely to the new scheme and will operate on that basis. There is a learning curve for the ETBs and their capacity to do this and indeed for the youth organisations. The youth organisations will be getting used to a very different system of applications and a very different basis for seeking funding for the future. It is a much more transparent and better system than what we have at the moment.

Catherine Murphy (Kildare North, Social Democrats)
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My last question concerns enrolments. Were people initially enrolling children and then not taking up places? Is that why the change was made?

Dr. Fergal Lynch:

Is the Deputy referring to early years?

Catherine Murphy (Kildare North, Social Democrats)
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Yes.

Dr. Fergal Lynch:

What was happening was that we were assessing numbers attending childcare facilities on the basis of what we called a snapshot period of a month, for some schemes. This meant that records, which were mostly manual because this was pre-electronic or computer-based records, were taken for a period of time - a month. When we went back to see what proportion of time children were actually using of the time they were recorded as using, there were differences. That is where the difficulty arose. Under the new system, both the national childcare scheme and ECCE where we are much better at this now, there is a much more specific system for recording attendances and funding childcare providers on that basis.

Kate O'Connell (Dublin Bay South, Fine Gael)
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To follow up on Dr. Lynch's comments, is he suggesting there were no electronic records until two years ago? My understanding, based on the answers given to Deputy Cassells, is that the Department started its auditing two years ago. Was everything being filled in on paper before then? I would argue that electronic records started much earlier than two years ago.

Dr. Fergal Lynch:

The programme implementation platform, PIP, which was the electronic system, was only introduced in 2014. Before that, we were talking about manual records.

Kate O'Connell (Dublin Bay South, Fine Gael)
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We are now in 2019. If we go back two years, we are in 2017. There were, therefore, three years of electronic records that were not being checked in terms of attendance versus headcount.

Dr. Fergal Lynch:

Records were being built up. I certainly would not hold out 2014 as a year in which full records were kept. There was a difficulty in the context of how many providers, particularly the smaller ones, were not keeping records or not keeping adequate records.

Kate O'Connell (Dublin Bay South, Fine Gael)
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In response to a question from Deputy Cassells, Dr. Lynch stated, "Pobal organises all of the schemes for us and it also carries out compliance work." Does Dr. Lynch believe Pobal did that job? If Pobal could not organise the scheme, and if it did not have either small or large providers using anything other than a pen and paper - which, by the looks of things, was completely inadequate - and if compliance was its other role, which I imagine was adhering to the rules and not committing fraud, then it did not do its job right until two years ago. During the entire period it was in receipt of €500 million in public money. I am a big supporter of the ECCE scheme. I have had the benefit of it and I still have one child in it. As a believer in the scheme, I am very concerned that a system was set up whereby companies - be they small or large - could get payments on the basis of children being enrolled, with no checks as to whether those children ever spent even a day in the crèches or facilities involved. This appears to have been going on for eight to ten years. The Department of Children and Youth Affairs is the body in charge of Pobal. It is almost similar to the relationship between the Department of Health and the HSE. What happened was just reckless, particularly in the context of €500 million in public money being involved.

Dr. Fergal Lynch:

Can I answer some of those questions? The Deputy has raised some important issues. I shall put some context on it. First, this was not an issue for the ECCE scheme, which operated well and did not have the sort of difficulties-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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What was at issue?

Dr. Fergal Lynch:

The lack of attendance records. The attendance records were better for ECCE than those for the other schemes. The CCS, which was provided by the community-based, not-for-profit sector was a lot less well developed and had difficulties in that regard. At the beginning, when the money was being given by Pobal for this purpose, the focus was on making sure that parents could afford the service, as much as possible, rather than asking questions about attendance. I stress that the rules of the game at that stage-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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Dr. Lynch stated earlier that good value for money for the Exchequer was the focus up until 2015.

Dr. Fergal Lynch:

The focus was also on ensuring good value for money for parents and ensuring that they were not being overcharged for childcare.

Kate O'Connell (Dublin Bay South, Fine Gael)
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However, the State was being overcharged. If children were being registered with facilities and not attending, then Pobal was overcharging when using public money.

Dr. Fergal Lynch:

As already stated, the rules at that stage did not specify requirements for attendance. It was a grant system that was based on enrolments rather than specifically on attendance.

Kate O'Connell (Dublin Bay South, Fine Gael)
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That is an astounding lack of governance. It is my experience that where there is an opportunity to commit fraud, people will always avail of it. The Department left itself wide open. As I understand it, a childcare provider could register 20, 40, 50 or 100 children and could claim payment per child, but the children might never have spent a day in the facility. Surely that is just a glaring lack of governance when it comes to public money. This was not going on for just one year, such as when one sets up a new scheme and there may be teething problems, it was happening on for eight years.

Dr. Fergal Lynch:

It was certainly not the ideal way of-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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That is putting it mildly.

Dr. Fergal Lynch:

The key issue is that when these schemes were introduced in 2008 and 2009 - and further back - there was a concern to try to support parents who were looking for childcare facilities-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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In reality, the Department supported providers. It handed money to Pobal and Pobal, in turn, handed it to them. The money went to the providers and it did not go to the families. They were not getting good value. The Department did not set out what it proposed to do. One is not getting good value for money if the child is not turning up.

Dr. Fergal Lynch:

The model was based on a staffing grant system. The focus was on the cost of staff in not-for-profit entities. It was much lower amounts of money in those years. We are going back a number of years. I am trying to describe a situation whereby the support for childcare began with staffing grants and basic supports for not-for-profit childcare providers. Over time, and only in recent years, we moved to a subsidy system based on funding a child for a number of hours in a specific centre. There is quite a difference between those two models. With regard to what Pobal was able to do or was being asked to do in the earlier years, it was being asked to check that the system was operating satisfactorily-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Which it was not.

Dr. Fergal Lynch:

-----and obviously to check that there was no fraud.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Which there was.

Dr. Fergal Lynch:

The instances of fraud or alleged fraud have been very low. The number of instances where there were allegations of fraud have been low indeed. I would distinguish very clearly between a failure to comply with over-claims or claiming for more hours than the children attended, and a fraud that involved people taking the money for their own use, which is in a very different space. I am not justifying the system but it was a very belt and braces and basic system that operated for a number of years.

Kate O'Connell (Dublin Bay South, Fine Gael)
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It is fraud. Perhaps I misunderstood what was said earlier, but the basis for the payment was enrolment and registration. Then it changed some years ago to base it on attendance.

Dr. Fergal Lynch:

That is correct.

Kate O'Connell (Dublin Bay South, Fine Gael)
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With the retrospective governance that we are very fond of in here - and I mean in general and not just in the context of the Department of Children and Youth Affairs - my interpretation of what Dr. Lynch has said is that the rules then allowed for the fraud or the over-claims. The rules, as set out by Dr. Lynch's Department and transferred to Pobal, allowed for this to happen. The Department changed the rules two years ago and the role of Pobal changed. Reference was made to the recouping of €937,000 in the year 2017-2018 and €4.7 million in the year 2018-2019, which, nicely, is five times the amount from the previous year and seems to be a worrying trajectory in fairness but maybe it is not going to continue to €25 million next year. Hopefully, we are not going there. Dr. Lynch has just said the incidence of fraud was very low, but low in what terms? A sum of €4.7 million is not low. The Department has been able to recoup €4.7 million from over-claims since the rules were changed. Will Dr. Lynch explain how that figure has increased by five in a 12 month period? Has the Department just become better at catching people or at claiming back? Who is guilty? Was everybody at it? Was it the case that large providers copped on to the lack of governance and the availability of money? Was it the CCS groups? Who was doing it without knowing? It is my view that small childcare providers would have known that if they did not have the child in front of them they could not get the payment for the child.

Dr. Fergal Lynch:

There are a couple of points there and I shall clarify some things. In most cases where over-claims were identified, they occurred in instances where children did not attend for the same numbers of hours. It was not that they were not attending at all, but that they did not attend the full number of hours.

Kate O'Connell (Dublin Bay South, Fine Gael)
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There was payment for 20 hours and the child was only coming in for ten hours.

Dr. Fergal Lynch:

Something like that, or 15 hours, or whatever it was.

The Deputy asked about the recoupment rate increasing by so much.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Fivefold.

Dr. Fergal Lynch:

The focus has been on the highest risk to the Exchequer. The compliance visits were focused on the larger providers to which we were paying out more money, and specifically on the schemes where most of this difficulty arose, which were the CCS and related schemes. It is important to stress that we started from a very different perspective, which was to try to assist childcare providers to provide a reasonable level of service with a certain level of State money that was relatively modest at the time. That has grown significantly since then. The system has become more sophisticated, even to the extent - at last - of a proper computer-based system to capture everything. The sector we were dealing with, especially the CCS where the difficulty arose, would have involved small, not-for-profit providers.

Kate O'Connell (Dublin Bay South, Fine Gael)
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They must have been making a profit.

Dr. Fergal Lynch:

I am not sure they were making much of a profit, to be honest. They would repeatedly tell us, and I have no reason to disbelieve them, that they are lucky to stay in business. They have great sustainability difficulties and any money they claim has gone into the provision of the service, not into their own pockets. That is how I would distinguish it.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Will the Department provide the committee with a list of all of those in the community childcare subvention, CCS, scheme and what Dr. Lynch referred to as related schemes, the amount paid to each of the not-for-profits or whatever they are, for the past ten years? Can we find out from where the biggest portion of money which was overclaimed was returned? If State funds are being handed out-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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I refer to CCS scheme and early childhood care and education, ECCE, providers, and everyone in early childhood who is in receipt of these payments. Are there any data? Dr. Lynch said that the compliance visits were to the largest providers which were the greatest risk to the Exchequer. This is the low-hanging fruit where the most money can be recouped. I assume there is no point in going into someone with ten children-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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-----who may have overclaimed by €7. It would not be worthwhile to go back in there, but not in the case of a big provider or one of the larger companies with providers everywhere and this was routine. Will the committee be told how much of the budget went on CCS and ECCE from day one? I am concerned that a red flag was not raised about why there was 100% uptake in a certain area. On uptake, the ECCE scheme had an uptake of over 95% when it first started. When the Department gave us uptake figures for childcare, were those figures, which we have used for ten years, based on registration but not attendance?

Shane Cassells (Meath West, Fianna Fail)
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Can we get the information sought by Deputy O'Connell in a table by group, so that the CCS payments are grouped separately by county?

Kate O'Connell (Dublin Bay South, Fine Gael)
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We need it broken down as to who received the money, from when, and then the committee can look at it as spikes.

Dr. Fergal Lynch:

We can certainly give whatever information we have on payments by category, that is, by ECCE, CCS, the childcare employment and training, CET, scheme, and the various other schemes. We will do it by county, if we can. We will have to ask Pobal for it.

Dr. Fergal Lynch:

I assume not.

Kate O'Connell (Dublin Bay South, Fine Gael)
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No. I am sure that would be confidential.

Shane Cassells (Meath West, Fianna Fail)
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I do not think there would be any problem with that as they must all hand in their financial statements anyway for public moneys.

Ms Bernie McNally:

There are 4,500 service providers.

Kate O'Connell (Dublin Bay South, Fine Gael)
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That is what we want.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Ms McNally said there are 4,500 types.

Ms Bernie McNally:

There are 4,500 in total across all the contracts. At one time there may have been about 3,000 services, but I will double-check those numbers. However, that has reduced now. We have a better system now called CCSP which would have about 3,000 on that. The numbers are large.

Kate O'Connell (Dublin Bay South, Fine Gael)
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We need the numbers and we could group it ourselves. The officials can see what they can get us.

Ms Bernie McNally:

May we liaise with the committee on what is sought?

Kate O'Connell (Dublin Bay South, Fine Gael)
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Where a provider has had large amounts of overclaiming, is there any punishment? Say a particular company was particularly efficient at registering and enrolling children but not looking after them, what is the punishment? What is the naughty step for lack of compliance? Will the provider be turfed out of the scheme in the future? Will it be inspected more regularly? What is the slap on the wrist?

Ms Bernie McNally:

We have tried to improve everything incrementally in recent years, including rules and contracts. It is really only since 2017 that we have had a more robust process in place. That includes a three-year compliance framework. We very much work with the providers. Where a provider has made an overclaim, we give it the opportunity to dispute that and then we start to introduce penalties. Currently, the penalty is that in year 2, if we find non-compliance on a second visit, we can withdraw its programme support payment or refuse to offer it to the provider. That is the payment that amounts to €19.4 million annually. It is built into the compliance framework, contracts, etc. that we can refuse the provider access to that payment. That is a lot of money for small services. We can also refuse capital. We have fairly good capital available annually, and not being able to access that is certainly a sanction. The biggest sanction is that we are recouping it. If a provider has overclaimed, we go in and change the PIP registration so that if the provider is expecting to receive a couple of thousand euro the following week, it will not receive that due to having overclaimed. That is the biggest sanction. The programme support payments and the refusal of capital is the current provision. If at the end of the third year a provider remains non-compliant, we can withdraw its contract.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Am I correct that the women's refuge in Rathmines, and women's refuges, come under Tusla? The Rathmines refuge closed some time ago. Can anyone confirm that it is still closed?

Mr. Pat Smyth:

I can confirm that we are using that as a temporary facility for homelessness, but it will open again as a women's refuge, probably in September.

Kate O'Connell (Dublin Bay South, Fine Gael)
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It was a women's refuge, then it was closed to be refurbished.

Mr. Pat Smyth:

Yes, that is correct.

Kate O'Connell (Dublin Bay South, Fine Gael)
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It is very close to where I live. It was closed for refurbishment in the context of operating as a women's refuge. Is that correct?

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
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So it was done up as a women's refuge and now it is being used for homeless people.

Mr. Pat Smyth:

The issue there was ensuring we could get the staff and a provider. We are working with one of our aided agencies to provide that from September as a women's refuge.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Was there any extra capacity when it was done up? One issue was that when women ended up there having fled a difficult situation, there was no facility for bringing a child with them. Was that dealt with as part of the doing-up?

Mr. Pat Smyth:

Yes, it has been made a very modern facility from that perspective. Its capacity has been improved.

Kate O'Connell (Dublin Bay South, Fine Gael)
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However, it is not being used for the purpose.

Mr. Pat Smyth:

Not yet, but it will be.

Kate O'Connell (Dublin Bay South, Fine Gael)
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On the counting of women's refuge beds, I understand that Rathmines is still being counted as though it is a women's refuge. Am I right or wrong?

Mr. Pat Smyth:

It is not open at the moment.

Kate O'Connell (Dublin Bay South, Fine Gael)
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I know that.

Mr. Pat Smyth:

We can check if it is being included in the interim period. It will be available from September. I can confirm after the meeting whether it is being included in numbers.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Perhaps Mr. Smyth can do so this afternoon. It would be easy enough to find out. I understand that it is still being counted as refuge beds but it is not currently a refuge. Mr. Smyth mentioned staff. Where are the staff who were there previously? What happened to them during the doing-up phase and where are they now?

Mr. Pat Smyth:

Some of those staff still work with us in other elements of the service and others have retired from that facility. They are engaged in other work around domestic violence and in other services.

Kate O'Connell (Dublin Bay South, Fine Gael)
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They were deployed somewhere else temporarily. Can we get some more detail on that?

Mr. Pat Smyth:

We can do that.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Were there redundancies paid and so on? I want to know where the staff went. Were they given redundancy? Were they given money to move to a different job? Are they returning to the facility in September with the experience they had?

Mr. Pat Smyth:

We did not engage in redundancy schemes around that. Instead, staff were redeployed within existing services.

Kate O'Connell (Dublin Bay South, Fine Gael)
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My final question is to Dr. Lynch. Regarding the pay of childcare workers, it is very concerning that there is a 25% turnover of staff, as referred to by Ms McNally. The person who looks after one's children is the most important person in the child's life after oneself. Perhaps one's husband might be ahead, but the childcare provider is second after him. It is because it is a caring, feminised profession that the pay is so low. The Secretary General expressed his sympathy for the workers' situation, acknowledged their low pay and indicated his high regard for them. However, sympathy, acknowledgement and high regard do not pay bills. It is a matter of great concern that the pay for the mostly female workers in this sector is so low. The Department has a role in regard to pay in the context of the focus on quality. If staff are not adequately paid, we will not attract quality people and, as a consequence, children will suffer. Although the Department does not actually employ the staff, it does have a function in this regard. People are being paid €11.93 per hour.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Thank you, Chairman.

David Cullinane (Waterford, Sinn Fein)
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I welcome Dr. Lynch and his team. I apologise if any of my questions was asked earlier. Will Dr. Lynch explain what the national childcare investment programme is, when it started, and what it does?

Dr. Fergal Lynch:

The national childcare investment programme is an earlier programme which was put in place quite a number of years ago. It was in place from 2007 until 2010. It was then replaced by subsequent schemes. Basically, it operated capital grants for childcare facilities throughout the country. It followed an earlier EU scheme called the equal opportunities capital programme, EOCP, which operated between 2000 and 2006. That was partly EU funded.

David Cullinane (Waterford, Sinn Fein)
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What was the total cost of the programme?

Dr. Fergal Lynch:

The total value of the EOCP was €230 million. In its time, between 2000 and 2006, it provided 39,580 places. It was replaced by the national childcare investment programme which operated between 2007 and 2010. The figure I have for that was €178 million in funding with 24,347 places.

David Cullinane (Waterford, Sinn Fein)
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Out of that €178 million, 847 different childcare facilities were awarded funds under the programme. Is that figure correct?

Dr. Fergal Lynch:

I do not have that specific figure but I can check for the Deputy.

David Cullinane (Waterford, Sinn Fein)
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How many of those would have been private facilities?

Dr. Fergal Lynch:

I do not have that information as it is going back a number of years. I can check it for the Deputy. I know in more recent years that the proportion would be four private facilities to one public facility. However, that is in subsequent years.

David Cullinane (Waterford, Sinn Fein)
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My figure is that out of the 847 childcare facilities which benefited from that fund, 501 were private. Has the Department undertaken any analysis of how many of those are still in operation today?

Dr. Fergal Lynch:

Again I am afraid I do not have that information. We can come back to the Deputy on it. The current number of providers has gone up to about 4,600. Out of that 80% would be private. I would imagine a good number of them would still be in operation but no doubt some of them would have been closed. If there is particular information the Deputy needs, we can get that for him.

David Cullinane (Waterford, Sinn Fein)
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The reason I asked for this information is that there was a parliamentary question on how many of these facilities were still in operation. The response was “it is not possible to provide an accurate number of services that received funding under the NCIP, both community and private, that remain in operation to this day”. Why is that? Is it because it is information the Department has not sought or because it is difficult to get it?

Dr. Fergal Lynch:

I think it is because it goes back in time and was even before the Department of Children and Youth Affairs was established. Equally, the EOCP before it was run by the then Department of Justice, Equality and Law Reform.

Ms Bernie McNally:

We are hoping to do an audit on what facilities are still in place. Under the national development plan, childcare has been identified as a strategic priority. We have a commitment to €250 million for it. To make the best use out of that money, we want to do an extensive audit on what is in place. We have done some desk-based work already. We will be doing more and commissioning some assistance with it. We may be able to do that as part of that work.

David Cullinane (Waterford, Sinn Fein)
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From a process and procedures point, there is a commission of investigation in place regarding mother and baby homes. Obviously, it is independent and must do its work. However, there is much public concern about the commission’s refusal to release information to affected family members on where their relatives are buried. I have spoken to some family members who say it is painful and shocking that this is the case. Has the Department expressed a view privately on this matter?

Dr. Fergal Lynch:

The commission itself is an independent entity set up by the Oireachtas, and whose independence we absolutely respect.

We do not in any way interfere with its operation but the commission produced a report on burials. Its most recent report, the fifth interim, was on burials and included a comprehensive analysis of the information it had on hand. The commission encountered difficulty trying to identify individuals buried in individual sites, depending on the level of information and records, which go back 60 or 70 years and more. I am not trying to speak in any way for the commission but my understanding is that it tries to be as helpful as it can with the information it has. It will finalise its final report next February and will deal more with the issue of burials. My impression, although I do not speak for the commission, is that it would be anxious to give any information it can give at that stage. Most of its focus has been on burials, including trying to identify where exactly the sites are and how many people were buried there, and trying to match birth certificates with death certificates. Short of doing excavations, DNA analysis and so on, it cannot always confidently say who is buried where.

David Cullinane (Waterford, Sinn Fein)
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I fully accept everything Dr. Lynch said but given the matter is a source of public commentary, and some relatives have raised concerns about it, has the Department any idea why the commission refuses to release the information to family members? Nobody has been given any indication as to the rationale behind it.

Dr. Fergal Lynch:

I was not aware the commission was refusing specifically to release information of that kind. Nevertheless, while I again stress I do not purport to speak for it, I know the commission was anxious to keep the information it had within the bounds of its investigation until it issued its final report, which is normal. I see the commission, essentially, as a form of a court, so anymore than I would not go to a court of law asking for information of that kind, the Department and I have not asked the commission to issue information of that kind.

We try, however, to keep the lines of communication as open as possible. A monthly bulletin, for example, on what the commission is doing and any developments in that regard is published on our website, although I accept that it does not go into the type of information the Deputy described.

David Cullinane (Waterford, Sinn Fein)
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I fully accept that it is a quasi-court, that it is independent, and that it would be inappropriate for the Department or anybody to intervene directly in the work of the commission. I have no difficulty with that but there seems to be a fundamental issue for the families involved. If there are lines of communication between the Department and the commission, perhaps there could be an avenue to reflect some of the concerns of those family members. Ms Maeve O'Rourke, a human rights lawyer and lecturer at the National University of Ireland Galway, stated, "[A]s a State body under our ECHR Act 2003, the commission of investigation is obliged under Irish law to give effect to people’s European Convention rights". She went on to state that the rights include the right of family members of a deceased to information about the fate of their loved one, including burial location.

We are coming from a period when society was closed and insular. It is a throwback to that type of Ireland. People want a much more open and less insular approach to such tragedies and sensitive issues. Will the Department bear that in mind? While I do not advocate that it should directly intervene in the work of an independent commission, if there are lines of communication where those concerns could be expressed, it would be appropriate at least to communicate those concerns if they have not yet been communicated. Has the Department been contacted about the matter, or has any organisation raised such concerns with it?

Dr. Fergal Lynch:

Not to my knowledge. Many other issues have been raised but I am not directly aware of the specific issue the Deputy described. As he noted, we maintain lines of communication with the commission in respect of its work. I can bring his concerns to the commission's attention but it would be on the basis of communicating information rather than asking it to take a particular course of action. I can certainly communicate with the commission.

David Cullinane (Waterford, Sinn Fein)
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An issue that is not directly related to the Department but that has a direct bearing on children is child homelessness. What engagement and interaction is there between the Department and the Department of Housing, Planning and Local Government in respect of the issue? The figures have increased steadily. There was a marginal decrease in the rate of child homelessness in the most recent figures but, over the past five or six years, there has been an upward trend in the number of children in emergency accommodation and children who are homeless. It can have a deep impact on them. A recent episode of "Prime Time" highlighted the human side of the matter, where children told their stories and experiences of emergency accommodation. There is a stigma and a lack of certainty, and the fact that the accommodation is not a home has an impact on them. While I accept it is not the Department's direct responsibility, it is clear this has an impact on many children. Will Dr. Lynch comment on the interaction the Department with the Department of Housing, Planning and Local Government?

Dr. Fergal Lynch:

We certainly maintain significant contact with that Department and we regard child homelessness as an issue of serious concern. We are anxious to help in any way we can. We have taken a number of steps. We sit on the interdepartmental group on Rebuilding Ireland. Through a sponsors' group, we engage on Better Outcomes, Brighter Futures, where we examine the overall provision of services in various Departments including that of Housing, Planning and Local Government. We engage through Tusla contacts and, for example, through the Dublin Region Homeless Executive, which has a joint protocol with Tusla on interagency co-operation in respect of homelessness. We try to support children in the context of a specific childcare scheme for those who are homeless. There is a specially constructed part of a childcare scheme, which covers children who are homeless. While the issue is not our direct responsibility, we take it seriously in respect of the types of supports we offer for children and families who are homeless.

David Cullinane (Waterford, Sinn Fein)
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Are some homeless children not included in the figures presented by the Department? My understanding is that the Department of Housing, Planning and Local Government presents homelessness figures that include people in emergency accommodation in the main. Are there children under the watch of the Department of Children and Youth Affairs who would be classed as homeless? I refer to children who might stand separate from those classed as homeless under the definition of the Department of Housing, Planning and Local Government.

Dr. Fergal Lynch:

No, my clear understanding is that all children are counted in the measure.

David Cullinane (Waterford, Sinn Fein)
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Dr. Lynch referred to "all children". Under what category do they fit?

Dr. Fergal Lynch:

The figure includes any children registered as homeless, irrespective of whether they live with their family or in other circumstances. The Department of Housing, Planning and Local Government keeps homelessness statistics on that basis. I cannot think of a category that would not be included-----

David Cullinane (Waterford, Sinn Fein)
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When the Department of Housing, Planning and Local Government categorises children as homeless, does it seek information from the Department of Children and Youth Affairs?

Dr. Fergal Lynch:

Ms Fisher might answer the question.

Ms Éimear Fisher:

The Deputy might clarify what type of information or service he means. Children who are homeless are counted by the Department of Housing, Planning and Local Government but, in addition, other services are provided by Tusla. Money is provided, for example, to Focus Ireland to fund a project worker who provides services through Focus Ireland, and to family resource centres, FRCs, to provide services such as rooms suitable for children to do homework, washing and laundry facilities and so on. Children do not live in those facilities, however, but instead live in accommodation counted by the Department of Housing, Planning and Local Government. Other supports wrap around the supports of that Department. There are FRCs in Mulhuddart, Ballyfermot and Ballymun, with homeless services where people can receive food, laundry facilities, Wi-Fi, family support and other support services.

It is proposed to expand this further in 2019 with a proposal to recruit five project workers to work in family resource centres with homeless families, again wrapping around the Department of Housing, Planning and Local Government. The Department has worked very closely with that Department in the extension of the capital assistance scheme for young people leaving State care. There is a view that some people who are leaving State care may be susceptible to homelessness. Where that happens, there is a strong element of support and engagement with the Department of Housing, Planning and Local Government to ensure the capital assistance scheme is open to local authorities and approved housing bodies. Between ten and 20 young people have been accommodated under that scheme and more properties are "sale agreed".

David Cullinane (Waterford, Sinn Fein)
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Is the Department satisfied that the overall figures capture child homelessness in its entirety?

Ms Éimear Fisher:

To my knowledge, they do.

Dr. Fergal Lynch:

I will need to check, but it has just been drawn to my attention that children in refuges may be viewed as short-term out-of-home and not counted in the homeless figures. I am not saying that for certain, but I will need to check. It depends on how the homeless figures are counted.

David Cullinane (Waterford, Sinn Fein)
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Children in direct provision centres are also classed separately. There are a couple of separate categories and I was trying to tease out whether there were others.

Dr. Fergal Lynch:

Subject to checking, I am not aware of other categories. We can come back to the Deputy on the matter.

Mr. Pat Smyth:

We do not have direct dealings with the criminal justice system in terms of the 6,000 children in the care of the State. Effectively, none of them is caught within the system; 92% or 93% are in permanent foster care arrangements. There is a cohort of children, approximately 500 to 600, who are in residential services that go right up to the heavyweight, special care spaces which at any time contain approximately 14 children with very high needs. It is relatively short-term accommodation.

Mr. Pat Smyth:

We have a number of units. There are two in Dublin and one in Limerick. The places available are spread between them. There is one in Ballydowd and-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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Deputy Aylward might be coming over.

Mr. Pat Smyth:

The emphasis or objective of the State is to keep children under 18 years out of the criminal justice system. The facility in Oberstown was part of the move away from the justice system. My colleagues will give more detail in that regard. Tusla's challenge is that we find an increasing number of older children, 16 and 17 year olds, with very high needs, cases in which criminality is an element of what they are dealing with and what we are trying to protect them from. That certainly has an impact on the resources we have available to deal with it. There can be very challenging cases.

Mr. Pat Smyth:

The main services we provide on the residential side are in relatively standard residential care units which we have bought privately for between two and four children housed with our staff. The children are usually in residential placements for a period of time. It is seen as an interim treatment, or a facility where their behaviours are stabilised and I hope they work back down into more standard foster care arrangements.

Mr. Pat Smyth:

No; it is about two thirds to one third in that facility.

Mr. Pat Smyth:

Two thirds private.

Mr. Pat Smyth:

That is absolutely right.

Mr. Pat Smyth:

Correct.

Mr. Pat Smyth:

That has been the case for a number of years and it is a service with which Tusla works closely through residential services.

Mr. Pat Smyth:

It is much higher than that.

Mr. Pat Smyth:

As the facilities are set up, as far as possible, to be places that resemble normal family arrangements, they are staffed 24/7 by childcare workers, social workers and domestic staff. It depends on the number of children in a house. If there are four children, which is probably the more normal arrangement, it can be the case that there is only one child who is in crisis. In such a case, there would obviously be fewer but perhaps more skilled staff.

Mr. Pat Smyth:

Yes.

Mr. Pat Smyth:

It is something that has not just happened in the past year; it has been ongoing for the past few years. Retaining social work staff within child protection services is a problem here, in the United Kingdom and pretty much across the world. We have a history of recruiting a high number of staff, but, between retirements and staff leaving after a number of years, it has been a pronounced problem. We were talking about this issue at the Joint Committee on Children and Youth Affairs earlier in the year. Last year we recruited 150 social workers and lost 150; therefore, our numbers were static. Out of a total whole-time equivalent count of between 1,550 and 1,600, approximately 10% of that number are recruited every year and 10% leave. That is, in fact, better than some of the figures in the United Kingdom, but it is a problem. We have put in place-----

Mr. Pat Smyth:

There are a number of factors to it. We have done a lot of work in terms of trying to understand from people why they leave. One of our most recent studies, based on 13 exit interviews in a particularly high-need area in Dublin, indicated a mix of work-life balance and people getting promotions into other jobs. People come into a very high-need area, become quite skilled and then move on to another area. There are a number of pieces. There are about 215 social workers trained in the universities every year. We have recruited around 150 so we are getting a very high percentage of that new intake. However, we are in competition with the HSE and the voluntary agencies. The HSE is in a continual space for staff in disability services, elderly services and hospitals. They have quite a high need as well. Since our staff have come through the child protection and welfare side, they are seen as quite experienced and it is a fast upskilling so they are in demand in other areas. A lot of young graduates also travel after a number of years. We have discovered that staff will work for a period of up to two years and then leave because they can draw their contributions back down at that stage. It is like a ready-made savings scheme. Our total head count is around 3,900 as of the end of April.

Mr. Pat Smyth:

No. They can draw their pension contributions because they are working under two years.

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

They work for two years and then they can leave with a lump sum, essentially.

Mr. Pat Smyth:

They are young graduates.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes. They are saving to travel and then going off.

Mr. Pat Smyth:

Yes.

Mr. Pat Smyth:

It is up to two years. They cannot-----

Mr. Pat Smyth:

Up to two years, they can. After two years, they cannot withdraw it.

Mr. Seamus McCarthy:

It is frozen once they go over two years. They continue to-----

Mr. Pat Smyth:

I think that facility was always there.

Mr. Pat Smyth:

The other piece is that our staffing is about 87% or 88% female. Since it is a new agency and we have recruited quite a number of people, we have between 150 and 175 people on maternity leave at any point in time. That creates the other demand. They are not leavers but vacancies are created in the system for up to a year. That is a constant churn. We have developed a workforce strategy which includes the recruitment campaign and getting much more vocal about how a career in child protection and welfare is quite rewarding. Despite the bad press that our business inevitably gets when something goes wrong, and that is quite serious, the overwhelming story from social workers is that it is a very rewarding workplace and a very rewarding career. I see all the time that the effort and enthusiasm people put in goes way beyond what one would expect in a public sector organisation. That has to be acknowledged in respect of staff who work in very difficult circumstances in some cases.

We have introduced a lot of change. We have talked about this before in terms of services. We have been training and developing people on a piece called Signs of Safety, a very good system that is trying to establish links for the child who is at risk with their family and local area. It aims to maintain kids in their own environment, protect them, work with them and their family but also to draw others into that network so that the child is protected and remains in a family environment. Social workers have made very strong statements about the usefulness of that and we have developed it around the country. Those kind of initiatives are about changing the culture and the way we do business. That has had an impact in terms of social workers looking at the business and saying it is a better way to do things.

We have a lot of initiatives looking at why people leave the organisation, better ways of recruiting and retaining staff. It is not a secret that we have some areas that are very difficult to work in. They are the areas where we struggle to retain and get people into. Sometimes it is a circle that reinforces the vacancy problem, in that young newer graduates end up in those areas. Their managers can often be relatively inexperienced so there is quite a high need to support them. That is a challenge because it is probably the last place where new graduates should be. We have tried to address how we support them, and how we can better train them and find better ways. It has been a challenge in the public sector. The rules around recruitment are there for very good reasons but we find it difficult sometimes to get the right people to the right place as quickly as we need to within the rules. We have had to look at ways of trying to create pools of staff that we can use when we run into problems with staffing in particular areas.

Mr. Pat Smyth:

I will let my colleagues talk about the longitudinal study because there is work going on around that. One of the points that is really worth getting out there is that when children age out at 18, we place a lot of emphasis on ensuring that there are clear aftercare plans for those young people. For a large majority of them, we continue to provide both financially and in terms of service, care and assistance. Many of them are in education. Kids today are more likely to be 19 doing the leaving certificate. Although they legally become an adult at 18, they remain effectively in the care of the State. We have just over 2,000 young people aged over 18 who are in formal aftercare arrangements with us.

Mr. Pat Smyth:

Yes. Over two thirds of them are in full-time training or education. We never manage to get that figure out there. They are successfully----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is it 600 or 6,000 who are under 18?

Mr. Pat Smyth:

There are just over 6,000 children.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

And then there are 2,000 over 18. It is a sort of continuation.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

So it is only 600.

Mr. Pat Smyth:

They would be in residential care. The vast majority of those under 18 are in foster care arrangements with families.

Mr. Pat Smyth:

The placements of the vast majority of kids who are in foster care are stable. When Tusla was established, we were faced with a double challenge, one aspect of which was the availability of resources. There was no policy in place at that time to ensure that those kids stayed with the families as much as possible, so kids got moved around. Kids may still be moved around today, possibly because they have not settled in a particular placement or because there is some other issue. Kids may be moved around in such circumstances, but in as far as it is possible, and this is something on which we are strong, we ensure that kids stay in their placements. In the regions of north-east Dublin and Dublin-mid-Leinster there are approximately 250 instances of kids who are in foster care under private arrangements. By and large, those kids remain in those foster care arrangements. There is difficulty in finding local foster carers for them. Once a child moves into private foster care, it is challenging to move him or her, purely because of attachments. If the family support is good, the money aspect is seen as less important as the aspect of care for the child. Ultimately, the objective is to ensure that the kids have a stable childhood that is as good as possible so that they become adults who can look after themselves.

Mr. Pat Smyth:

An absolute myriad, yes.

Mr. Pat Smyth:

The State is their parent and we are their minder. It is up to us to ensure that the services they need are provided. Ensuring those children receive the therapies and other supports they need to stabilise their lives and to move them to a less intense environment is what we do. We depend enormously on the health services with respect to mental health, counsellors, and addiction supports for these children. Where it is not possible for us to get those services through the health services, we have to buy them independently.

Mr. Pat Smyth:

Back in 2014 we got 43,000 or 44,000 referrals. Referrals come from An Garda Síochána, teachers, or medical professionals. The volume was approximately 44,000 at that stage. When we kicked off we had just under 10,000 unallocated cases, which means cases which are waiting to be allocated to a social worker. Last year we had 57,000 referrals, which represents an increase of approximately 40% on that volume. There are good reasons behind that. The number of unallocated cases is down to 6,000. That number is higher than we want it to be. These cases are concentrated around five of our service areas. We have 17 service areas throughout the country. The unallocated cases are, in the main, in those five areas. We have gone through the first reason that the number of unallocated cases is high, which relates to staffing. We have also been doing a lot of work on our understanding. When Tusla was created we had 17 separate areas. We have a history going back to the days of the health boards, which is not that long ago. It was 2005. The systems remained independent of each other at that time. We did not have the same way of dealing with referrals in each of those 17 areas. The feature about which I talked earlier, the signs of safety model, is about ensuring that the same model of care and way of dealing with these cases is used across all areas.

Initial referrals into the system are normally triaged immediately and risk assessments are carried out. HIQA has consistently found that, even in circumstances in which the number of unallocated cases is very high, Tusla does not leave kids at risk. That initial process, within the first 24 hours, is about seeing whether the referral is high risk and whether the kid needs to be seen. We then go into a process of initial assessment and then allocation. Depending on the complexity of the case, the initial assessment can take a bit of time.

We are quite engaged in the analysis of the actual assessment and working with the people who refer children to us at the moment. We get a lot of referrals from An Garda Síochána. We have been trying to work with An Garda, as well as with teachers, schools and others, to put in place systems which will give us a lot more information about the referral. In light of the massive increase in referrals, we are trying to ensure that we get information that makes sense and on which we can make good assessments.

Mr. Pat Smyth:

Yes.

Mr. Pat Smyth:

It is certainly part of the mix but, if one looks at the trajectory, the numbers were increasing anyway. Mandatory reporting is, of course, part of that but it is also because people are now aware that the agency exists. We see that as a positive thing.

Mr. Pat Smyth:

We have an out-of-hours service in place which works quite well with An Garda and other agencies. If a child is taken into care, in some cases it will be gardaí who will be looking after him or her. We have a 24-hour arrangement whereby a contact-----

Mr. Pat Smyth:

Yes. Somebody in the local area can be contacted for advice.

Mr. Pat Smyth:

The national childcare information system, NCCIS, is the operational system social workers utilise. We got that running in every area in July of last year. A lot of work is still being done to make maximum use of it, but we already have very high usage numbers. At this point all of the immediate information about children is on the system. In respect of a kid up to the age of 18, there was a lot of information in paper files and in other formats going back years, so an awful lot of work has been done. If a child was in our care or came to our attention when he or she was one, two, or three, that old information is needed if that child happens to turn up again when he or she is 12 or 13. That is what people are now working through.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Will Mr. Smyth talk us through what happens with regard to the NCCIS? If a minor ends up in a Garda station, what happens next?

Mr. Pat Smyth:

An Garda Síochána will send a referral to Tusla, for whatever reason, through our referrals system.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is the child in a room this whole time?

I am focusing on the child here. Where is the child?

Mr. Pat Smyth:

If a child is taken into care under section 12 the child may, for a period of time, be in the Garda station or, as more likely and as publicised recently, in some situations will end up in a hospital where they have not been able to provide care for some reason or another for a shorter period of time.

When Tusla engages with the Garda in that case, we have a facility and a service nationally with a private provider that when a child is taken into a-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is the name of the private provider because then we can find out-----

Mr. Pat Smyth:

I will get the name of that provider for the Deputy.

Mr. Pat Smyth:

Absolutely, yes.

Mr. Pat Smyth:

It is nationwide cover.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It dispatches a person----

Mr. Pat Smyth:

A social worker-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----from the agency-----

Mr. Pat Smyth:

-----from our service who will work with them in terms of supporting-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----who will go to the child in the hospital or the Garda station.

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In the intervening period while the telephone calls are being made, and if the child does not end up in hospital, who is in custody of that child?

Mr. Pat Smyth:

If the child is in the Garda station-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The child is in the custody of the Garda.

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Are there set rules around who is in the room with the child and is that person Garda vetted?

Mr. Pat Smyth:

Yes. There are protocols around that from the Garda's perspective. We have a close and strong developing relationship with the Garda in terms of trying to smooth many paths that were not there before the agency was created in terms of-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of the provider of the company, the name of which we will find out, I assume it is pulled from Tusla's recruitment pool. What are we paying per hour to an agency social worker versus a regular social worker?

Mr. Pat Smyth:

Five Rivers is the name of the agency.

Mr. Pat Smyth:

There is no doubt that the agency which is providing a social service and has social workers is definitely in competition with us for social workers. Undoubtedly, some social workers, no more than any of the rest of us, may choose to work in that kind of area rather than with Tusla.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Do we know what we are paying per hour for that service or is it just a package?

Mr. Pat Smyth:

We do. I will provide details on that.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If we could get information on what we are giving an agency-----

Mr. Pat Smyth:

We would have procured an arrangement so we will provide that.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Other than the Five Rivers people, is there any other sub-contracting out or what other private companies are we using?

Mr. Pat Smyth:

A feature of the past ten years is that the care demand for children has grown past what the agency was able to meet in the past. Many services were run down, either because they were not fit for purpose or they could not meet the demand. We spend around €100 million per annum on procured services for private residential and private foster care. We spend about €80 million per annum on-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Some €100 million euro for private-----

Mr. Pat Smyth:

I am sorry. We spend €80 million for private residential care and about €20 million for private foster care.

Mr. Pat Smyth:

Out of a total figure of about €750 million. We also provide a grant to voluntary agencies. We work with more than 700 voluntary agencies. We pay in excess of €150 million to those agencies across a range of care from supports into schools for school completion programmes - €25 million is put into programmes to support children who are at risk of leaving school - to domestic violence. About €20 million is put into family resource centres, all of which funding is aimed at supporting children who are at risk or are vulnerable or who may come into our care.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

My question was whether we are using any other agencies. We are giving money to voluntary agencies and family resource centres but other than Five Rivers, is any State money going to a private provider of services?

Mr. Pat Smyth:

Yes.

Mr. Pat Smyth:

In terms of private residential services, I gave the figure of €100 million. The figure for private residential services is €80 million.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Smyth mentioned earlier in reply to the Chairman that there are 250 children in private arrangements.

Mr. Pat Smyth:

That is the cost of them.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I might have misinterpreted him but I think what Mr. Smyth was saying was that sometimes it is better to keep them where they are because the focus is on the stability of the child.

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Who is getting the cheque? Is it the people keeping the child? Money is not the top priority; it is care of the child, which is a good thing. People asking for extra money to keep particular children because they know Tusla is stuck is what I am getting at.

Mr. Pat Smyth:

In terms of our approach to that, we pay around €300,000 per child residential placement per annum.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

For how long?

Mr. Pat Smyth:

For a year.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Tusla pays €300,000 per year.

Mr. Pat Smyth:

It is €300,000 per annum, yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Per child.

Mr. Pat Smyth:

It is €6,000 a week per child.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I might sell a few of mine. Jeepers.

Mr. Pat Smyth:

We can, of course.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I just want to know where the money is going.

Mr. Pat Smyth:

Absolutely, and that is public at the moment. There is a public procurement process around that running at the moment.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of the €300,000 per child, is that the 250 high-risk individuals?

Mr. Pat Smyth:

It would be, yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is a company-----

Mr. Pat Smyth:

There are a number of them.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There are a number of private companies getting paid €300,000 per-----

Mr. Pat Smyth:

Per placement.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----complex case.

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

When did we start using these companies?

Mr. Pat Smyth:

It was probably 2010 or 2011. I would have to go back-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I would argue that they saw what a basket case Tusla was and they saw a market and felt they could get the money out of it. That is what I would do if I was them.

Mr. Pat Smyth:

There is another line on this. We have capped the numbers we invested in that over the past number of years.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What does Mr. Smyth mean by that? Does he mean that Tusla limits the complex cases?

Mr. Pat Smyth:

No. We have put in place other measures. We have a very strong programme called Creative Community Alternatives. There are two things I would call out. First, we talked about Signs of Safety, which is about trying to put in place community based structures with some of the grant-aided agencies we work with and also in terms of the way we build family supports around children. We provide much more money into those placements that are retained at local areas which, as we move forward in the next number of years, will give us an opportunity to take much of that €80 million and put it into local arrangements and placements, where we can, that deliver much more for that area.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Smyth is saying that by putting in extra resources we will reduce the number of complex cases and, therefore, we will not need as many of these-----

Mr. Pat Smyth:

It is not a simple binary piece, the idea being that with a combination of more resources going into at-risk children at a much earlier stage in their lives they do not end up with those complex needs. More than 50% of the children in those placements are aged 15, 16 and upwards. They are high needs, late teenage children so-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

These are not children with special needs. They are high needs children.

Mr. Pat Smyth:

They are not special needs. They are high needs. That is the space.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are sub-contracting out the more complex cases to private companies at €300,000 per child.

Mr. Pat Smyth:

Those children are in our care. They are allocated to social workers so they are still under our care in those arrangements.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Who is ultimately responsible? Is it the man getting the €300,000 or the social worker in Tusla?

Mr. Pat Smyth:

The care being provided is contracted through the private agency but in terms of the care of the child, that child is the responsibility of Tusla. We have allocated social workers to look after those children.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The move towards privatisation of this started in 2010.

Mr. Pat Smyth:

It was certainly when the financial crisis hit when there was a lot of-----

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There was no financial crisis for the company getting €300,000 per child.

Mr. Pat Smyth:

If that was the space. The other side of the issue is that the care and arrangements that are put in place for these children are the primary concern. The challenge facing us in the State is that our own residential services have a similar cost.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sure that the private company quantified the cost to the State in advance. That is where it got its figure.

Mr. Pat Smyth:

The State has a longer-term cost in the form of the arrangements relating to its employees. As the Chairman mentioned, of all of the areas in which we are involved, working in and managing residential services, can be very challenging. There is a high rate of staff vacancy and sick leave. As we move into the next five years, we will ideally utilise the resources available through private arrangements and place them around kids at a more local level.

Mr. Pat Smyth:

Yes.

Mr. Pat Smyth:

That is right.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We do not know what the margin is, but it is worth investigating.

Mr. Pat Smyth:

It certainly is, and I-----

Mr. Pat Smyth:

No. It comes from us.

Mr. Pat Smyth:

It depends on the age. For under 12s, it is €325 per week. For over 12s, it is €352.

Mr. Pat Smyth:

Correct. They are the vast majority.

Mr. Pat Smyth:

We paid out €105 million or thereabouts last year in foster care payments to parents in respect of those children.

Mr. Pat Smyth:

Yes.

Mr. Pat Smyth:

Very different.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is the €80 million not spent on 250 kids?

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sorry. I believed it was 250.

Mr. Pat Smyth:

Actually, I can confirm that Deputy O'Connell is right. Some 260 children are costing the €80 million.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It was 250 a minute ago. They are twice as expensive.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I asked for a table before the break regarding the 3,000 or 4,500 service providers. When we get it, could it start with the providers receiving the largest amounts first? For example, if Deputy Aylward was getting an amount, I was getting less than him and another Deputy was getting even less, could we have it in that order? In the next column, could the table show the amount of money that providers gave back in overclaims in respect of 2017, 2018 and so far this year? If a company or organisation received €1 million and returned €10, could we have that information in the chart, please?

Deputy Cassells spoke about the uptake. When we introduced the second free preschool year, it had a negative effect on places for babies. Did the Department of Children and Youth Affairs not expect that to happen? The delegates will know more about this than me, but my understanding is that, given the staff bands, a higher staff ratio is required for small babies than big ones. From my experience and anecdotally, many facilities decided that it was not worth their while minding small babies when there was more money to be made minding bigger ones who needed less staff. Why was that a surprise? It would have seemed obvious when introducing the second year.

Ms Bernie McNally:

It was not a surprise, and what the Deputy described is not quite what happened.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay.

Ms Bernie McNally:

While there has been much media attention given to the notion that the second year of ECCE cannibalised space for children aged up to three years old, the facts do not support that. Rather, they show that, as well as doubling capacity in ECCE, we also doubled the number of places for children aged up to three years old.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Then Ms McNally chose not to correct Deputy Cassells when he used the word "cannibalised".

Ms Bernie McNally:

Yes, and I know that that was the word used in the media, but it is not the case. We know that many families face major challenges in getting places for their babies, wobblers and toddlers, but that is because of the growing demand for childcare and because more women are working. It is a success story in some ways, predominantly one about the return of women to work and so on. Just to be clear, we now have twice as many places for children aged up to three years old as we had four years ago and nearly twice as many places under ECCE. We managed to do both.

Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Let us say that someone cannot get his or her baby into a facility at six months. Should that person phone the Department and say that nowhere will take the baby because everywhere is full?

Ms Bernie McNally:

We fund 30 city and county childcare committees throughout the country. They are a source of support for parents and providers. Clearly, the Dublin committees are very busy and parents might not get the same level of support, but that service exists. There is also a website, www.myccc.ie, that parents can visit to get their local committee's contact details. We appreciate that there are capacity issues, but the amount of investment that has gone into early learning care and school-age childcare in recent years is encouraging growth in the market. We are seeing that, and we hope to see further expansion. Deputy Aylward might have asked a question on this matter. For every service that closed down last year, approximately two and a half opened with five or six times the number of children. The number of services is increasing constantly, as is their size. Four years ago, the average service had 33 children. Now, it has 44 children.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Is that a good thing?

Ms Bernie McNally:

It is a good-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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I would not think it was a good thing to have institutionalised care of children. We do not have a great history of that in this country.

Ms Bernie McNally:

No. Many parents choose smaller services for their children and, while there is still not enough access for parents, it is good that there is more than there was. For services to run viable businesses, though, they need a certain critical mass. A number of years ago, we had 1,000 services with ten children in each. No one will be able to apply for an income with that type of income. Since those very small services were not sustainable, it is probably good that we are seeing some growth in the critical mass. As to the question of whether major centres are good for children, it is important that those services be of a good quality and that we inspect them well and so on to ensure that they are of a high standard.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Is there a limit? Can services just keep growing? I am concerned about the economies of scale being built into the system. Large providers will be able to operate at a much greater scale, have better buying power when it comes to food, dodies, shampoo, toilet roll and so on, and generally work out as being cheaper, which will knock out the smaller provider. Will we end up with a monopoly or a few large providers minding our children in massive warehouses? That is where it will end up if we stay on this trajectory. Has the Department considered that?

Ms Bernie McNally:

Yes. It will also be considered as part of the funding model that we mentioned. Currently, we do not step into the market and regulate or cap the number of places. We are examining international experience. We are conscious of the issue, but Ireland has not moved significantly in that direction yet. We could move more in that direction, especially with the introduction of the national childcare scheme and if the Government continued to invest in childcare. That is a matter to which we will continue giving attention.

Kate O'Connell (Dublin Bay South, Fine Gael)
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In terms of retrospectively changing the rules, will this take into consideration those childcare providers which have their business models based on an increasing trajectory? For example, a provider may have a facility for 4,000 children in a warehouse outside Dublin. How can the Department change the goalposts for a large company investing in facilities? At what point is it all about the children?

Ms Bernie McNally:

Quality for children is the Department's first and foremost consideration. Quality is stamped across everything we do, even when we address affordability. The grant agreements we have with these services allow us to say what we need.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Is there no issue if the Department says “No” after a year?

Ms Bernie McNally:

We can change the rules.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Can the Department do that unilaterally every year?

Ms Bernie McNally:

Yes. Obviously, we have to change the rules as we are issuing the contracts.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Is it only a year's contract and it is rolling?

Ms Bernie McNally:

Yes, it is a year's contract.

Kate O'Connell (Dublin Bay South, Fine Gael)
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That is fine.

Ms Bernie McNally:

For example, when the ECCE scheme was introduced, although legally it was not a requirement to have a qualification, we built into the contracts that staff must have a QQI level six qualification to be a room leader. We try to leverage quality in the contracts all of the time. We do so incrementally, as we did with school-age childcare because it was totally unregulated. In the past, such services could have 25 children in a room if they chose. That is why we introduced the regulation of one to 12 which gives them a reasonable profit margin and, yet, is good for children.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Earlier on some surprise was expressed at the low uptake of ECCE funding. In the April cohort, it was half the expected uptake. Is this where people would start their child in the ECCE scheme because they came of age in April? What is meant by the three points, January, April and September?

Ms Bernie McNally:

Those three edge points are gone now because the Government gave funding for two full years. It was a temporary issue. Some parents may have asked what was the point in putting their child down for 11 weeks.

Kate O'Connell (Dublin Bay South, Fine Gael)
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That is my point. Why did the Department not see that coming?

Ms Bernie McNally:

We did.

Kate O'Connell (Dublin Bay South, Fine Gael)
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No parent would ever start their child for six weeks.

Ms Bernie McNally:

We did not have enough money to give a full two years to everybody. Some international evidence suggested introducing the scheme to allow children access to preschool from the time a child turned three until he or she went to school. We gave parents the choice to do so.

Kate O'Connell (Dublin Bay South, Fine Gael)
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That is in place now.

Ms Bernie McNally:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
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The universal component of the community childcare subvention programme values each child at €1,040 per year. Has the Department any figures to show how many from the cohort of children between six months and three years of age are in that scheme? My understanding is that many crèches, especially in Dublin, did not take on children who were on that scheme.

Ms Bernie McNally:

Currently there are 31,425 children registered in that programme and getting the €1,040 a year towards childcare.

Kate O'Connell (Dublin Bay South, Fine Gael)
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What is the total number of children in childcare?

Ms Bernie McNally:

The total number of children in childcare is a relatively small number.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Has this washed out too? Are childcare providers not taking on children from that scheme?

Ms Bernie McNally:

When one has over 3,000 services signed up to such a scheme, one will have some services which will not do it. The fact we have 31,000 children on the scheme shows there is a good take-up and it is being used.

Kate O'Connell (Dublin Bay South, Fine Gael)
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My next question for Tusla may not be for this committee today but for the children's committee. However, I often hear from constituents that Tusla is called into divorce proceedings when child protection allegations are made against a partner. In such cases, an accusation is made, generally against the father of the child, of some inappropriate behaviour. I know this is a sensitive issue and I will tread sensitively here. Tusla's role is to protect the child. It cannot wait for the outcome of the divorce proceedings and the judge to rule. It has to accept what it is told. I have been told it has been referred to anecdotally in Tusla as the nuclear button where a normal divorce situation goes terribly wrong. I have also been told this is an increasing phenomenon. Is that the case? I am sure it costs money to deal with these cases, meaning it relates to this committee.

Mr. Pat Smyth:

I am going to kick for touch a little bit on this question. Obviously, any allegation which comes in to us is treated seriously and must go through a process. There is somewhat of a danger when one ties instances like divorce to such cases. One is into territory which I am not going to comment on publicly. We could look at that in the children's committee.

Kate O'Connell (Dublin Bay South, Fine Gael)
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My understanding is that this is a common enough practice. It ends up with Tusla having to protect the child. The next thing the divorce is over. The allegation is proved to be completely untrue. That child often then goes back to the home of the person who made the false accusation. Is it a good idea for the person who made such a terrible accusation to end up with custody of the children?

Mr. Pat Smyth:

In terms of assessment of any abuse or referral made about a case to Tusla, it will be dealt with in a particular fashion. It is something that experienced practitioners will be working within. If there is increased evidence of that in a space, we will certainly welcome that information from the Deputy and examine it.

Kate O'Connell (Dublin Bay South, Fine Gael)
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I am looking at cases which have come to me. I have Tusla here now so I am raising it.

Mr. Pat Smyth:

I am not sure we would carry information on this specific issue. I am not aware of it being a major issue or a concern our staff have.

On the number of placements in Rathmines women's refuge, there are nine family spaces in it.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Are those in the renovated refuge?

Mr. Pat Smyth:

I do not think there was any increase in the number of spaces after the renovation. They were made more children friendly. The unit was not safe but that has been sorted out. It is three children to each adult.

Kate O'Connell (Dublin Bay South, Fine Gael)
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That means spaces for up to 36 people.

Mr. Pat Smyth:

Yes. An additional five places are being opened up in south Dublin in Rathcoole in the third quarter.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Are these spaces being counted in Tusla's figures as refuge spaces even though there is a homeless hostel there.

Mr. Pat Smyth:

The nine places are part of our capacity but there is a note on those records that it has been refurbished. Those nine places are available to us.

Kate O'Connell (Dublin Bay South, Fine Gael)
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What happened to the staff?

Mr. Pat Smyth:

The staff have been allocated to other services in the domestic and gender-based violence sector. They are either working in other units or services. We have been working with Fórsa on an agreement as to what happens with the opening of the unit.

As I said, there was a proposal. Rathmines refuge, ten years ago, was run through a voluntary agency and then came into the ownership, for want of a better word, of the HSE around 2007 or 2008. One of the proposals was that a funded agency would again operate that agency and that is being worked through.

Kate O'Connell (Dublin Bay South, Fine Gael)
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It is now HSE but the housing-----

Mr. Pat Smyth:

No, it is now Tusla. It came to Tusla on 1 January 2014. The staff were full-time Tusla employees when Tusla was created. Those staff are working within other services at the moment.

Kate O'Connell (Dublin Bay South, Fine Gael)
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What is the arrangement between Tusla and the Department of Housing, Planning and Local Government about paying for it? Did Tusla just hand it to them?

Mr. Pat Smyth:

There is a peppercorn rent there at the moment on that until-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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How does that emerge? I am being serious because it is my area and I have worked very closely with it for years.

Mr. Pat Smyth:

It is for vulnerable women. It is not something-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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I know exactly what it is for because I have dealt with the area. I have worked as a pharmacist in the area so I am fully aware of the situation.

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
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How do we spend money doing up a facility for women in a crisis and make it suitable, which was one of the major issues, yet do not use it as a refuge? We can say it now but we were kind of hiding children there for years because one could not say to a woman, "Leave your child out in the car and come in". That is the reality of it and I was very uncomfortable with that but it was the only way.

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Now we have a situation where the facility has been done up, is suitable for nine women plus three minors in their company, yet it is a homeless place. How does that happen? Who asked Tusla for the refuge?

Mr. Pat Smyth:

The reality was that the unit was not ready to open as a refuge.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Why?

Mr. Pat Smyth:

There were issues to be worked out from a staffing perspective, as I understand it, since early this year and that has been part of the problem.

Kate O'Connell (Dublin Bay South, Fine Gael)
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I asked about staffing but was told they were all reallocated. What is the issue?

Mr. Pat Smyth:

The proposal that Tusla had put forward was that the unit would be run by a voluntary agency in the area of providing some services.

Kate O'Connell (Dublin Bay South, Fine Gael)
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So post doing up the unit Tusla was going to give it to a voluntary agency to run. Am I right?

Mr. Pat Smyth:

Yes. We had some issues that had to be worked through.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Was it a private operator?

Mr. Pat Smyth:

Not a private operator.

Kate O'Connell (Dublin Bay South, Fine Gael)
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So a not-for-profit section 39?

Mr. Pat Smyth:

A not-for-profit, yes. And not section 56-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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Whatever. One of those sections. Not Tusla anyway but not Five Rivers either.

Mr. Pat Smyth:

Not us. We had some challenges around that from some of the existing staff. Those issues had to be worked out at the WRC.

Kate O'Connell (Dublin Bay South, Fine Gael)
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That is kind of where I was going before the break and you avoided it nicely but now we are into it. What issues did Tusla have with staff? Did they not want to change their terms of contract? Sure why would they?

Mr. Pat Smyth:

That is what we have to work out in terms of trying to provide-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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So because Tusla could not sort it, the unit was given to housing for homeless people.

Mr. Pat Smyth:

No. We wanted to make sure that the unit was used.

Kate O'Connell (Dublin Bay South, Fine Gael)
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How did that conversation happen?

Mr. Pat Smyth:

The last thing we want is a strike and the unit does not open because people-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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The unit is not open for the intended purpose.

Mr. Pat Smyth:

I take that point. We plan to open the unit in quarter 3 and that is what we are working towards.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Is that quarter 3 of this year?

Mr. Pat Smyth:

Yes.

Kate O'Connell (Dublin Bay South, Fine Gael)
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How is that chat about the voluntary agency and staff going? Now that the staff have been reallocated they are hardly going to come back.

Mr. Pat Smyth:

No. We are pretty confident that we are on the right road in terms of working that through. As I said, the people who worked in that unit are in other services with the same terms and conditions as they were in previously.

Kate O'Connell (Dublin Bay South, Fine Gael)
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So the staff got sorted out but the women did not, again.

Mr. Pat Smyth:

As a service it is our job-----

Kate O'Connell (Dublin Bay South, Fine Gael)
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But Tusla is still counting them. It is very difficult when there is what is unfortunately a very well utilised refuge on which money has been spent making it fit for purpose but, because Tusla cannot sort out its staffing problems, the unit becomes a homeless shelter and Tusla still counts it as a women's refuge.

Mr. Pat Smyth:

We know it is not used as that. It is our intention and our very strong aim to open the unit as a women's refuge; that is what we are working towards. That is what it is for.

Kate O'Connell (Dublin Bay South, Fine Gael)
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I know. I thank Mr. Smyth.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It is late in the evening and most of my questions have already been asked but I will touch on a few that I want clarified.

A very good and worthy service is being provided as in many cases both parents now work but, without all of the grandmothers and grandfathers of this country, the service would be under very serious pressure. Fair play to all of the grandmothers, in particular, who mind grandchildren, including my own wife.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Some grandparents do so but some have sense.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I wish to refer to the surplus and surrender of funding back in 2017 and 2018. As much as €58.7 million in 2017 and €48.5 million in 2016 was returned even though there are waiting lists and there is a demand for the service. In my own constituency people have approached me to start up services. Why was this money not utilised instead of being handed back? Why was it not given to start-ups and new start-ups for childcare? Returning the money does not sound right with the high demand for childcare and scarcity of money. There was money available yet it was handed back instead of giving it to new recruits or start-ups.

Dr. Fergal Lynch:

The main reason for not handing it back in the first instance was it was not clear how much, if any, underspend there would be until very late into the year. It was really September after the recruitments and start-offs, from September that year. So it was very late in the year before one could make a clear judgment that that would be the extent of underspend during the year. Second, it is not a case-----

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It does not sound right that one must wait until the end of the year before one knows whether one will have between €40 million and €50 million left over.

Dr. Fergal Lynch:

The reason for that is the nature of the childcare schemes. The new entry point is September each year so that is the critical point at which one can judge what one is going to need. Our estimate of money requirements was on the basis of the full year, taking account of the fact that the new term, so to speak, starts in September. That is why we were in that difficult situation. In addition to that then, it is not a case of just simply being allowed spend the money on something else. Money, particularly of that magnitude, would normally have to be surrendered to the Department of Public Expenditure and Reform, and the Government would have to make a decision on alternative spending rather than us simply saying that we will spend it somewhere else within the Tusla or the Department of Children and Youth Affairs' Vote even though it may be the case that we could identify particular areas where it could be spent.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What is the situation for 2018-2019 or the present situation? Has any money been surrendered this year?

Dr. Fergal Lynch:

No. In 2018, in fact we had a small supplementary that we required at the end of 2018. The reason for that was because, essentially, the early years component moved upwards and achieved its targets. The same will have happened in 2019. We actually ended up with the requirement for a small supplementary at the end of 2018.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is there funding available for new start-ups as there is demand?

Dr. Fergal Lynch:

We have money in the base for the current year and for our plans for the current year. Obviously, for 2020, there will be the normal Estimates process during which we will make a pitch for funding for 2020 and beyond. It is important to say that we have utilised the money in full both for 2018 and will do so in 2019.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That sounds good. I looked through the report by Pobal and in the section entitled Statement on Internal Control it was stated that "14% of contracts were deemed to be major non-compliant". That is 14% of €320 million so it is roughly €45 million. Does that imply there was value for money? What does the term "non-compliant" mean?

Dr. Fergal Lynch:

When it is major non-compliant the issue is where services have failed to count in full detail, and reflect in full detail, the attendances.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is the figure of €45 million correct?

Dr. Fergal Lynch:

We have updated our Estimates for a number of years. This morning I was describing what was actually happening in terms of overclaims and so on so we have significantly updated figures. I was explaining, this morning as well, how-----

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I was here.

Dr. Fergal Lynch:

Sorry, for earlier years there was a question of rules and specificity of those rules to determine whether or not the money was actually repayable, and then for later years, when we specified more clearly in the rules, what was required in terms of attendances. The figures that we are now working from were the ones that I talked about this morning - the €937,000 for 2017-2018 and the €4.7 million for 2018-2019.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Will that money be recovered?

Dr. Fergal Lynch:

Yes.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Will it be got back?

Dr. Fergal Lynch:

It can be got back either by way of recoupment through subsequent reduction or through a requirement not to make the payment in the first place because some of the compliance visits would have identified the problem before the money was actually being paid out.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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How much of the 14% or €45 million will be recovered?

Dr. Fergal Lynch:

We have moved on, I think, from that figure at this stage and these are the ones that we would work off now rather than the-----

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Was there falsification? That question was asked earlier.

Dr. Fergal Lynch:

I do not believe it was falsification, Deputy.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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A person may be paid for minding a child for eight hours a day, but may only do so for two hours. I am not going over the same ground again.

Dr. Fergal Lynch:

I appreciate the point being made.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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How does the Department prevent such practices? Are they still happening? Are spot checks carried out?

Dr. Fergal Lynch: