Dáil Éireann Debate, Thursday - 7 July 2022
136. Deputy John Paul Phelan asked the Minister for Children, Equality, Disability, Integration and Youth the level of take-up for the Transition Fund for Early Years providers; the estimates of the way this payment is supporting providers with their sustainability; and if he will make a statement on the matter. [35387/22]
View answerEnsuring financial stability of early learning and childcare services is a priority of Government. The Government has been strongly supportive of the sector, particularly since the onset of Covid-19.
The Transition Fund is in place to support providers between May and August 2022. The Transition Fund is designed to support the financial stability of services in the period between the end of Covid-19 supports under the Employment Wage Subsidy Scheme and ahead of the introduction of the new Core Funding Scheme in September 2022.
I am pleased that approximately 95% of providers have now signed up to the Transition Fund.
The Transition Fund makes a contribution of 7% of each service's calculated income capacity in respect of the weeks that the service is open. This is a significant contribution to services' sustainability. On average, approximately 70% of providers' costs are made up of staff costs and approximately 30% of costs are made up of non-staff costs.
One measure of financial stability of the sector is the number of services that open and close. Current data on service closures and openings are not markedly different to the trend in previous years. Moreover, the data on service closures identify the wide range of reasons for these closures as reported by providers themselves, including retirement of owners or other personal circumstances. Only a minority are reported to be related to financial stability.
These data indicate that the Covid-19 supports and the Transition Fund have proven successful in providing financial stability to the sector.
The main contractual requirement for the Transition Fund is that fees remain at or below September 2021 levels for the duration of the scheme. This has provided important financial stability to parents.
I am encouraged that providers have shown such willingness to work in partnership with the State towards the shared goal of delivering affordable early learning and childcare for families.
The high uptake of the Transition Fund bodes well for the introduction of Core Funding in September. This is further underscored by the fact that 89% of providers have now completed a survey which is the first step to coming into contract for Core Funding.
Core Funding will contribute to services’ sustainability and will significantly increase income for the overwhelming majority of services and provide greater funding stability. Core Funding is open to all eligible providers subject to their agreement to the recently-published Funding Agreement. Becoming a Core Funding Partner Service is, of course, optional but I look forward to a very high proportion of providers becoming Partner Services.
As you can see, I am committed to putting in place a strong foundation to improve affordability for parents and sustainability for services, as well as improved quality of provision, including pay and conditions for the workforce. This foundation will allow for further developments in future years.
