I welcome this opportunity to discuss the important issue of early learning and childcare. It would be difficult to overstate the importance of early learning and childcare to society, the economy, parents, but most importantly, to children. Recent years have seen an unprecedented growth in the level of State investment in early learning and childcare, and in the numbers of children in receipt of State supports to access these services, including children with disabilities, who are being supported through the award winning access and inclusion model, which has been recognised internationally as a really strong practice in terms of supporting accessibility to early learning and childcare.
Despite the major progress that has been made, significant challenges remain. The level of State investment remains low by international standards. The level of pay and working conditions in the sector does not reflect the fundamental value of the work that childcare professionals, who are young and nearly all women, do and the significant time they invest in their own education to achieve level 7 and level 8 degrees. Fees remain unaffordable, particularly for families who are availing of long hours or who have a number of children in childcare.
This Government is committed to addressing these challenges. We have set out an ambitious programme of reform for early learning and childcare through commitments made in the programme for Government as well as other key policy documents, including Partnership for the Public Good: A New Funding Model for the Sector; Nurturing Skills: The Workforce Plan for Early Learning and Care; the National Action Plan for Childminding; and the First 5 strategy. We have backed up these commitments with significant additional investment in budget 2022 through the introduction of a new €221 million core funding scheme and we have pledged to reach an annual investment target of at least €1 billion by 2028.
We all know that poor pay and conditions undermine the quality of early learning and care provision. Just last week, I published the annual early years sector profile 2021, which revealed the average hourly rate pay in this sector was €12.60. While my Department does not set wage levels or determine working conditions for staff in the sector, it has over a number of years provided a range of supports to service providers to enable them to improve wages and working conditions. These include higher capitation payments for graduates working in the sector and year-on-year increases in State funding. These supports make it easier for providers to offer full-time, full-year employment contracts to their staff.
In December 2020, I began a process to examine the possibility of regulating pay and conditions and the suitability of a joint labour committee, JLC, for the sector. That process culminated in the establishment of a JLC in December 2020 bringing with it a real prospect of addressing this perennial issue, particularly with the backing of that additional investment by the State through core funding to improve rates of pay across all roles in the sector and a further €38 million graduate premium in respect of graduate lead educators and managers. I acknowledge the independent nature of the Labour Court and JLC process and the hard work of its members to negotiate pay and conditions for employees in the sector.
The first stage of the work of the JLC has been completed with the recent publication by the Labour Court of a recommendation for an early years' educators and school-age childcare practitioner minimum pay rate of €13 per hour. A draft employment regulation order, ERO, was published by the JLC on 11 May 2022. There is now an opportunity for anyone interested to make representations to the JLC by 31 May 2022. The JLC will consider any representations it receives as part of its deliberations. The JLC must now decide whether to formulate proposals for an ERO for early years educators and school age childcare practitioners based on the Labour Court recommendation and also to consider its next steps as regards the other roles in the sector and whether there is potential to secure consensus with regard to these roles as regards pay rates and graduate uplifts. I have been informed that the Labour Court sat last week in respect of a referral from the JLC on the outstanding issues for a further ERO for other roles in the sector. The court's recommendation is awaited. The JLC will continue to meet and exercise its statutory function with a view to formulating and potentially adopting proposals for one or more EROs in the sector.
In addition to supporting the JLC, core funding will give providers a stable income source based on the nature of the service they deliver. Core funding is based on operating hours, number of places offered by services and the age group of children for whom the places are offered and, therefore, is proportionate to each service's operating costs. Structuring core funding primarily based on capacity means that services will have an allocation each year that will not fluctuate in line with children's attendance, as happens with the other Department funding schemes - the NCS and ECCE. With recent data from Pobal showing significant unfilled capacity across the sector, core funding should bring increased funding certainty and stability to providers. A very small number of providers, 1% in total, will have the same level of State income under core funding as under the current funding arrangements. These services have the highest levels of public income from the existing funding schemes. To ensure that no service will lose out through the introduction of core funding, I have committed to the funding guarantee under which no service that signs up to core funding will face a reduction in State funding. Full-time services and part-time services will see substantial increases in funding. Sessional ECCE standard capitation services will see an increase in income of at least 9.5%. Most ECCE higher capitation will also see increase in funding. No service will be left out of pocket. In addition, there will be a sustainability fund attached to core funding to provide an extra safety net for providers. Unfortunately, some misinformation has been circulated about the implications of the funding.
In particular, there have been suggestions that small services and services which only provide the ECCE programme will lose out. My officials have examined the evidence carefully and are satisfied that core funding does not create sustainability problems for services. Indeed, it will substantially improve the sustainability for the overwhelming majority of them. We have strong evidence to indicate that the ECCE in addition to core funding provides more than sufficient funding to cover the operating costs of sessional preschool services.
I am very encouraged by early indications of willingness to participate in the partnership for the public good, which is on offer through core funding. Already 92% of services have agreed to freeze fees in advance of core funding by signing up for the transition fund. Approximately 83% of providers have also completed the sector profile survey, the first step required for coming into contract for core funding, and more will have the opportunity to do so next month.
My officials and I continue to engage with representatives of some providers who have concerns in order to better understand these issues. However, it is important to be clear that the Department will not be accepting proposals made by sectoral representative groups to extend the scope for additional optional extras or voluntary contributions to be charged to parents whose children are participating in the ECCE programme. It is my view that this risks parents incurring additional charges for a universal service which is designed and intended to be free at the point of use and available to all families, regardless of ability to pay. This would be entirely contrary to the spirit of the programme.
I am happy, however, to make very clear my view about the centrality of the ECCE programme within the new funding model for the sector. The view of the expert group was unequivocal about ECCE being a fundamental component of the funding model in future and I was happy to bring its recommendations to Government and receive full approval. I will shortly award a contract for a review of the ECCE programme, which will prepare the ground for putting ECCE on a statutory footing, demonstrating the commitment to fully-funded preschool provision.
Core funding introduces a new fee management scheme that will maintain fee levels this September at the same level they were in September 2021, ensuring the cost of early learning and childcare to parents does not increase. This a step change in how we resource this sector. With these fee controls now in place, the real cost of early learning and childcare to families is set to reduce further this year through two national childcare scheme measures introduced under budget 2022. The end to the practice of deducting hours spent in preschool or school from the entitlement to national childcare scheme subsidised hours is benefiting an estimated 5,000 children from low-income families. I introduced this on 2 May, ahead of schedule. The national childcare scheme universal subsidy will be extended to all children under the age of 15 from September. This is worth up to €1,170 per annum and will benefit up to 40,000 children. The Government is committed to further investment through the national childcare scheme in budget 2023 to substantially bring down the cost of early learning and childcare for parents.
I commend the work of early learning and childcare services in assisting with the humanitarian crisis in Ukraine. The Department has developed a comprehensive action plan to respond to the early learning and childcare needs of Ukrainian children and their families but it would not be possible to implement it without the enthusiastic support of providers. The Department is providing a range of supports to help the integration of Ukrainian families, including providing information, supports and practical resources for them. We are identifying vacancies for Ukrainian children in services nationwide. We have increased grants for local parent and toddler groups to help them to welcome Ukrainian families. We are providing training and resources for early learning and childcare providers to help them to support Ukrainian children who attend their services.
I acknowledge the clear and significant challenges facing the early learning and childcare sector. These challenges are something on which many of us will agree. Fees are unaffordable for many parents. The level of pay for those working in the sector is too low. There are issues of supply among certain cohorts of children and in certain areas. The Government is committed to addressing these challenges, as I have outlined, through improving pay and conditions, reducing fees and increasing the availability of quality early learning and childcare.