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Childcare Services

Dáil Éireann Debate, Thursday - 7 April 2022

Thursday, 7 April 2022

Questions (338)

Michael Healy-Rae

Question:

338. Deputy Michael Healy-Rae asked the Minister for Children, Equality, Disability, Integration and Youth if he will examine and address a series of issues (details supplied) that will arise for providers under the new childcare funding model; and if he will make a statement on the matter. [19056/22]

View answer

Written answers

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 ELC and SAC, 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.

On 7th March I announced the rates and values for the Core Funding, and launched the online Ready Reckoner tool. The Ready Reckoner is accessible to all and is designed to give an idea of what services can expect to receive based on their characteristics. It also allows different scenarios of provision to be tested. This will show the benefits of applying for Core Funding when it is possible to do so.

Core Funding is related to the costs of delivery. Services opening longer hours or offering more places and places for younger children will receive a higher value of Core Funding than other services. This is because their costs of operation are higher.

Core Funding will support the quality of services by better enabling providers to attract and retain staff, including degree qualified staff; establish career structures; introduce or improve other features of provision that are demonstrated to contribute to quality (e.g. non-contact time, planning, training, curriculum implementation). Staff costs comprise approximately 70% of a service's operating costs. Core Funding makes available €138 million of new funding available to contribute to staff costs, which will be in addition to the existing income available to providers through the public funding through ECCE and the National Childcare Scheme (NCS) and parents' fees.

The precise implications of the funding for staff pay and conditions depends on the agreement of an Employment Regulation Order (ERO) by the Joint Labour Committee (JLC). However, the level of funding provided is significant enough to achieve a substantial improvement in levels of staff pay for the sector as a whole as well as the development of career frameworks. Improved terms and conditions, opportunities for progression and greater rates of staff retention are important steps to improving quality in the sector.

Core Funding will also make a contribution to non-staff overhead costs (for example, utilities, rent) that make up the remaining 30% of providers costs. In a full year, there is an allocation of €20 million for a contribution to non-staff overhead costs through Core Funding. This is the first time this type of funding has been provided.

Extra funding to support administration costs is also contained within Core Funding. This means that the budget previously allocated to Programme Support Payments, with an increased allocation, is now incorporated into Core Funding. Core Funding will make €25 million available to providers to support the costs of administrative time.

€38 million is allocated to contribute to support graduates to be Lead Educators across ELC and to support graduates as Managers in ELC or combined ELC and SAC services. Heretofore funding has only been available in respect of graduate Room Leaders in the Early Childhood Care and Education (ECCE) programme. The graduate premium aspect of Core Funding will encourage employment of graduates as Lead Educators across all ELC, not just in ECCE rooms as was the case with higher capitation payments.

Core Funding is equivalent to an increase of at least 9.5% in funding for ECCE services not lead by a Graduate Lead Educator. At a minimum, for every ECCE child €78.75 per week will be available from ECCE and Core Funding, compared to €69 in ECCE standard capitation only. As Core Funding is paid in respect of places rather than children, effectively this could mean a greater ‘per child’ marginal increase if the service has unfilled capacity. For example, with an ECCE occupancy of 9 children per staff member, Core Funding and ECCE together will be equivalent to weekly per child capitation of €80.92.

The overwhelming majority of ECCE-services with graduate Lead Educators will benefit substantially. While the approach of providing funding for graduate Lead Educators is different, the increased base rate funding plus payment based on capacity rather than attendance means that most services currently in receipt of higher capitation will see significant benefits from Core Funding.

Sessional services with standard capitation, Full Time, Part Time and School Age services will all see substantial increases in funding. Most ECCE services currently in receipt of higher capitation rates will also benefit significantly.

No service will lose out. I have issued a funding guarantee to ensure that no service will receive less in Core Funding that it previously received in higher capitation and programme support payments, if their circumstances remain the same. An estimated 1% of services will be caught by the funding guarantee. All other services will see increases in funding, and most substantial increases in funding.

The 1% of services for whom the funding guarantee will apply and those who will see just small increases from Core Funding are ECCE-only services in receipt of higher capitation for large groups of children and with high occupancy levels. Such services are currently in receipt of between €110-€120 per hour of service provided, which is the highest levels of public funding relative to the staffing levels required for operating those types of services and significantly in excess of average staffing costs required for this type of service.

I would also like to note that there is a sustainability fund in place where services are experiencing sustainability issues that can be availed of by services.

Core Funding is designed to facilitate a partnership between the State and early learning and childcare services for the public good. Its primary purpose is to improve pay and conditions in the sector as a whole and to improve affordability for parents, as well as ensuring a fair income to providers. I look forward to working together in partnership with the many providers who which to deliver services for the public good.

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