Core Funding is a new funding stream for Early Learning and Care (ELC) and School Age Childcare (SAC) services introduced in Budget 2022 and informed by the work of the Expert Group to develop a new funding model for the sector, outlined in Partnership for the Public Good: A New Funding Model for Early Learning and Care and School-Age Childcare.
Core Funding is a payment to providers designed to meet the combined objectives of:
- Improved quality through, among other things, better pay and conditions for the workforce;
- Supporting the establishment of an Employment Regulation Order through the Joint Labour Committee;
- Supporting the employment of graduate staff;
- Improved affordability for parents by ensuring that fees do not increase; and
- Improved sustainability and stability for services.
Core Funding will address some of the existing disparities in funding levels across ECCE and non-ECCE provision, providing funding proportionate to the age group of children being cared for and supporting the employment of graduate Lead Educators across ELC provision. Core Funding will operate in addition to and alongside ECCE (standard capitation), NCS, AIM and CCSP, and will replace ECCE higher capitation and incorporate funding previously allocated to the discretionary Programme Support Payments (PSP) from September 2022.
The change in approach to funding may mean that a very small number of providers (estimated to be approximately 50 in total or 1% of providers) would receive somewhat less in Core Funding to what they had previously received in Higher Capitation payments and Programme Support Payments (PSP) combined. This affects a small number of services who have particularly benefited from the previous approach to higher capitation by having large ECCE groups with high occupancy, with funding rates ranging between €110 and €120 per operating hour.
For this small number of providers, I have issued a funding guarantee whereby, under Core Funding providers will receive the same level of funding as they received from higher capitation and PSP, assuming the numbers of children, graduate staff and type of service offered remains the same in the 2022/23 programme year as in 2021/22.
The September-December 2022 allocation for Core Funding equates to €221 million in full year costs. While funding allocations to Departments are voted on an annual basis by the Oireachtas, an allocation for Core Funding is now established as part of the DCEDIY base budget. This puts in place a strong foundation for further developments in future years.
The level of investment being made available for Core Funding is an acknowledgement that high quality ELC and SAC costs more than the current income to the sector. Core Funding allows providers’ costs to increase to improve quality while ensuring these costs are not passed onto parents in fees and that services are not made unsustainable.
This is a major step forward in the approach to funding the sector and establishing a new relationship between the State and providers to deliver the public good. The significant additional investment reflects Government’s commitment to realising the First 5 target of investment of at least €1 billion by 2028. Core Funding introduces a strategic way of funding the sector and begins to implement the recommendations of the Expert Group to develop a new funding model. It is therefore anticipated that, Core Funding will continue to be made available into 2023 and beyond.