Education, childcare and labour market

What is in the budget?

  • €35 million in supports for higher education funding.
  • Increased state pension by €5 per week.
  • 30% increase in funding for the Training Networks Programme (Skillnet).
  • No change to ECCE childcare scheme.
  • €35.5 million for a new Single Affordable Childcare Scheme.

What does it mean for business?

The increased funding for third level (€35 million) is an important and positive development. This is a sector that has been put under huge pressures in recent years and the extra funding will go some way towards alleviating this. Total spending is 30% lower than it was in 2009 while student numbers are 21% higher. Student numbers are expected to grow even further in the next few years which will put further pressures on the system. It was also announced that a consultation would be initiated on the design of a new Exchequer-Employer investment mechanism for higher education. The risk with this proposal is that it becomes decoupled from an income contingent loan model. Given the scale of the funding requirements, a fees and loan model must form part of any overall funding solution. Ibec asked for a rebalancing of national training fund resources in favour of increased Skillnets spending and this was delivered.

The main change to childcare in Budget 2017 was the introduction of a Single Affordable Childcare Scheme which will come into effect in September 2017. The new scheme consists of two separate subsidies. The first is a means tested subsidy for children aged between six months and 15 years. Caution should be given to the means tested subsidy and it should be designed in such a way that it does not reduce the work incentives of second earners. If it is the case that where a second earner takes on a new job or extra hours  ends up paying much more than they previously would have on childcare, this could actually reduce female participation.

An additional universal subsidy will be put in place for those who are too young to qualify for ECCE (six months to three years). It is no coincidence that Ireland has one of the lowest female participation rates and one of the highest childcare costs in the EU. These new measures to address this challenge are welcome. Given that the total cost of both schemes will only be €35.5 million it is unlikely that this will bring our childcare costs down to European level norms. Ibec will campaign for this scheme to be extended in future budgets.

For more information on our childcare policy please see: Ibec- Labour Market Participation of Women.

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