Will education and childcare receive additional investment as we emerge from the initial pandemic wave?

Education and childcare are two essential areas of our lives. Schools prepare children for adulthood while providing the range of skills necessary to negotiate relationships, form a family and begin to explore life choices. Second level and higher education builds on this, facilitating young people to explore their potential, focus on specific skills and develop career opportunities. Ireland places great emphasis on having a highly skilled workforce as part of its attraction to multinational companies seeking to locate here.

Childcare is essential to a labour market where it is increasingly the norm for both parents to be employed outside the home – a situation as much driven by housing costs as personal choice. Ireland has chosen to deliver childcare as a private enterprise with state support via the Early Childhood Care & Education programme and the recently introduced National Childcare Scheme. The high cost (Ireland has the second highest childcare costs in Europe),a dependence on low paid staff,and long commuting times, for young families are all contributing factors to less-than-satisfactory childcare service provision. It is important to recognise that it is predominantly women who are most impacted by issues around the nature childcare in Ireland, women are more likely to leave their career or work part-time in order to manage or mitigate the cost of child care. Childcare costs also act as a major barrier to engagement with the labour market,this is especially relevant to single parent households, the vast majority of which are led by women. The National Childcare Scheme has a part to play in addressing this inequality however overall the significant problems within the childcare system in Ireland  still remain, exacerbated by the current COVID-19 crisis. 

Both education and childcare, because they are conducted in congregated settings, have been badly affected by the pandemic, causing problems for families as well as a knock-on impact on the economy; if children cannot be in school then parents cannot go to work. Similarly, childcare had to be suspended during the lockdown and is now reopening with restrictions that may, when combined with loss of revenue, affect the viability of many providers. Childcare, already a concern for many, has now assumed a greater national policy importance and will require greater investment. Will it be forthcoming?

Dr. Tom McDonnell of the Nevin Economic Research Institute (NERI) in a recent blog identifies education and childcare as two areas of policy failure in the sense that our spend in these areas is far below the comparative spend of other high-income countries. He estimates the underspend on education at €3.1 billion. Clearly, underspending on education will impact on the ability to meet future labour market requirements – especially in the context of the massive shifts in technology and skills necessary to adjust to climate change.

Childcare is a more immediate problem, which may be partially offset by a renewed focus on home working, but will still require significant additional investment. Providing basic services via a private provision model is all very well until it’s put under pressure – the usual solution to market failure not being an option. Childcare would be more effectively delivered through a national programme, something that is likely to be opposed by private providers who have invested in their businesses. Education is a different matter being publicly funded, albeit in a very incoherent manner, and therefore problems can be solved by relatively straightforward means – increased exchequer funding – more teachers, better training and management, smaller class size. This increased spending will probably be forced by the pandemic.

The obvious question is how do we pay for the required additional investment in both areas? Considering that we are among the lowest revenue generating states in Europe we could widen or increase taxes. McDonnell points to the paltry social security contributions from employers. Our reluctance about paying higher taxation while expecting better services also needs to be resolved.

Investing in education may very well be on the cards as we enter a period of Keynesian economics and continued low interest rates, but childcare is likely to be a more difficult problem requiring as it does a reverse out of an awkward policy situation or continuing with the existing poorly resourced and undirected strategy.

This Blog has been written by EAPN Ireland Board-member Aiden Lloyd