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insurance costs

'Reckless one minute, government policy two hours later': Martin says €1,500 for creches was 'made up on the back of an envelope'

Creches are seeing insurance quotes that are double that of last year.

LAST UPDATE | 19 Dec 2019

FIANNA FÁIL LEADER Micheál Martin has hit out against the Taoiseach and government over how they are handling the insurance crisis in the childcare sector.

Yesterday, it was announced that a once-off  €1,500 payment is to be given to each childcare provider to help them deal with extra insurance costs arising from the withdrawal of one insurer from the market.

The Minister for Children and Youth Affairs Katherine Zappone said the additional payment will be made in the coming days.

The additional money comes as concerns mount in relation to the rising cost of insurance for childcare providers due to the insurer pulling out of the market.

‘Reckless’

Chief among Martin’s criticisms was how the Taoiseach Leo Varadkar responded to a suggestion by the Sinn Féin leader of a payment to creche owners, hours before Minister Zappone’s announcement was made.

During Leaders’ Questions yesterday, Sinn Féin’s Mary Lou McDonald urged the government to provide a one-off payment to help childcare businesses. 

However, the Taoiseach dismissed the idea, stating that it would be “reckless”.

“If an insurer is unable to provide cover for a particular facility, be it a crèche, a childcare provider or anything else, there may be a good reason for that.  There may be a very high risk attached to insuring it,” he said at the time.

“For the State to wander in blindly and offer to cover the bills of a private company or even a public body, no questions asked, would be entirely reckless.”

A few hours later, Minister Zappone made the payment announcement, having met with Finance and Public Expenditure Minister Paschal Donohoe earlier that day to discuss the childcare sector’s concerns. 

This didn’t escape the notice of the Fianna Fáil leader.

“Yesterday it was reckless to give a subvention. Within two hours, it was sensible policy,” Martin said today.

On the funding announcement, he said it “seems to be made up on the back of an envelope”.

“I think we can deduce from that electoral considerations are at play,” he added, suggesting that the government’s response to the issue has been “confused” and “lacked clarity”.

He said the government “seemed to be caught by surprise by the crisis in the childcare sector with insurance”.

“I think the insurance crisis is becoming worse, it is hitting different sectors and the Alliance for Insurance Reform have been on about this one for about two years. And there are deep worries in some sectors that people will be priced out of business,” he said.

The newly-announced funding of €7 million will facilitate an additional payment of about €1,500 on average to individual providers, with the actual amount varying according to the size of the creche or daycare centre.

At an emergency meeting of the Joint Committee on Children and Youth Affairs, Minister Zappone said that the average creche is being facing a 100% increase in their insurance premium as a result of having to move to Allianz insurance company.

A statement from a government spokesperson said the minister announced additional funding in recognition of the additional administration that childcare providers were tasked with in 2019.

“This additional support amounts to €7 million. By contrast, Mary Lou McDonald was calling for open-ended compensation regarding insurance. That would have no upper limit and would be a reckless use of taxpayers’ money.”

In a statement this evening, the Department of Children and Youth Affairs said that Padraic Smith Insurance Broker had previously informed the Department that it was providing insurance services to 1,300 childcare providers. 

“Yesterday Allianz, the remaining underwriter providing insurance for childcare providers, informed the Department that it had provided insurance quotas to 1,100 new customers,” the Department said. 

“Today, they have informed the Department that the number of quotations had increased to 1,382,” it said. 

“The Department understands that a small number of applications have yet to be finalised. The Department urges providers to inform the parents using their services of their insurance cover for 2020.” 

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