On behalf of the Rural Independent Group I would like to express our sympathies to the family of the late Brendan Daly, iar-Aire, iar-Aire Stáit agus iar-Theachta Dála. I had many an interaction with him. He was a jolly man and a hardworking and diligent public representative always. Ar dheis Dé go raibh a anam dílis.

Last week the Federation of Early Childhood Providers launched a document outlining the challenges facing the sector. Over 200 of them came and protested outside the front gate of Leinster House. The sector is facing huge challenges. It has concerns about its financial viability and the level of control that organisations have over their business decisions due to the restrictions and increased regulations that are being placed on them regarding access to core funding and a freeze on fees. Private providers are being forced to operate at a loss and their running models are insufficient. The largest costs are down to Government impositions.

The sector has also experienced a staffing crisis, between retaining and recruiting, and that is another problem for it. This all has an impact on the number of places available for parents, families and people who want to enter the workforce, etc. The sector also faces numerous challenges in meeting the growing and diverse needs of children with additional needs, including funding constraints, staffing issues, limited resources and long waiting times for people to get assessments, and then there is no lead-in time. We must financially support staff, parents and families. While the employment regulation orders, EROs, and the freeze on the fees being introduced are welcome for parents and staff, they impose additional burdens on the providers. In return, access to core funding has been promoted as a means of reward. Private services suffer from the imposition of additional duties and regulations. There are many regulations putting huge pressure on these services. We want to have them and the vast majority of them are running impeccable systems in childcare. However, the model is clearly not working in its current form and providers are being forced to reduce choice and flexibility in services that should be meeting the demands of families.

As I said, providers are being forced to adapt models and reduce flexibility, with people being forced to choose full-day services while early childhood care and education, ECCE, and sessional options are being dropped. That is not good for families either. These impositions are harsh on the providers. Forcing them to trade non-viably is considered a crime and the Government is forcing this. One cannot knowingly trade in a reckless situation; that would be described as trading without proper financial funds but the Government is forcing this on top of them and putting them in a difficult situation. These are people who had the initiative and business acumen to set up their own centres and give loving care to our páistí óga. They are also giving great solace to the families who put their children in these places and they are giving those children a great start in life. We need to do something here to relax the regulation. We should sit down, listen to them and engage, which the Minister is not doing, and we should support them.

I thank the Deputy for raising this issue because tending to the early developmental needs of our children is perhaps the most important thing we can do in terms of the development of our society and country. I am a great believer in resourcing early childhood education and childcare. Our brains learn more between zero and three than we do for the rest of our lives. I said that to a more senior Cabinet Minister some years ago and he asked, "What hope does that give me?" but it is an important point.

What hope does that give us?

It is an important point because traditionally and historically we did not see it that way, and primary school started at four years old and so on. Children learn vicariously and they learn in different ways but structured childcare and development can be powerful for children. The Government has invested strongly in early learning and childcare. The budget in 2015 was €260 million and it is now €1.025 billion in 2023. That has reached the 2028 investment target five years ahead of time.

We need to do more and we want to do more. I pay tribute to the Minister, Deputy O'Gorman, in this regard. Some 120,000 children now benefit from a national childcare subsidy and that is an increase of more than 118% since this time last year. As we know, core funding has also developed and there are improved pay and conditions. I mention the EROs that were agreed by employer and employee representatives in a landmark pay deal for the sector, with over 70% of staff receiving a pay increase as a result. When we met the social partners in the context of the Labour Employer Economic Forum, LEEF, they saluted this development as a watershed moment in terms of pay and conditions for people working in the childcare sector, and that should be acknowledged. For year two of core funding the Minister has secured an additional €28 million, meaning an increase to €287 million in the budget for the sector, and that will give us a sustainable model with increases for all services.

There is an independent financial review of sessional services ongoing and the Minister has announced targeted measures for core funding for year two to support and fund smaller and sessional services. Services that are experiencing difficulty and would like support are encouraged to contact their city or county childcare committee to access case management supports. Services can be assisted on an individual basis through this route. Sustainability funding is available to partner services, community and private, that are experiencing financial difficulty.

Yesterday evening I briefly met some groups on the plinth. I encouraged them to engage with us in this respect. With the core funding scheme in operation since last September there is already significant evidence of success with 95%, or well over 4,200 providers, signed up, 98% of community not-for-profit services signed up and 93% of private for-profit services signed up.

This is serious. A total of 7%, or one in every 14, of early learning and care providers for school-aged children will not reopen in September. This is a startling figure. The Government has failed to address the concerns of early childhood care providers regarding low pay and core funding. The failure not only impacts on providers but also on families who desperately need these places for them to survive and stay in the workplace. This is resulting in 68%, almost 70%, of childcare providers being unsure out their business future. They cannot provide on thin air. They cannot provide when they are being regulated out of existence and not getting support.

The Minister, Deputy O'Gorman, seems to be tone deaf about their needs and he is not engaging. He is more interested in every other kind of thing that he is bringing in here and is certainly not dealing with our most young and vulnerable children who need those supports and their parents who need to be in the workplace. The reality is that the sector is completely underfunded, with 68% of providers saying they are not sure about their future in September. They cannot continue trading at a loss. They cannot put on extra fees. They cannot fundraise in these hard times. It is a serious issue and I am asking the Tánaiste to sit down and engage with them. I ask the Minister to engage with them meaningfully.

The rate of closures was down this year. It was the lowest this year compared with previous years. This is a fact that we need to take on board. The other side of this equation is parents paying very high fees. Part of the core funding model is to have management of fees in return for an allocation of additional funding. The results have been fairly significant for many parents in terms of the reduction of the fees and the bills they received in December last year. There has been an appreciable improvement in terms of the reduction of fees. We want to go further.

The model is one that we need to stick with and work with. If there are issues with particular providers we must see if we can tweak it and refine it to ensure sustainability. No one here is wilfully trying to put people out of business. The big concern of Governments all along has been that we allocate resources but the parents do not see the outcome of the allocation of those resources. There has to be a quid pro quo if we give more sustainable funding. We now have the employment regulation order. The costs were simply too high for people and they are still very high. This initiative has reduced significantly for the first time in a long time the costs for people availing of childcare.