Core Funding is the beginning of the new funding model to transform the Early Learning and Care (ELC) and School-Age Childcare (SAC) sector to one that is increasingly publicly funded and publicly managed, delivering a service for the public good, through a partnership between the State and providers, to the benefit of children, parents, educators and practitioners, and society overall.
In this, it is important to acknowledge that Core Funding will intentionally address some of the existing disparities in funding levels across ECCE and non-ECCE provision, providing funding proportionate to the cost of delivery and supporting the employment of graduate Lead Educators across ELC provision as well as graduate Managers.
While Core Funding will operate in addition to and alongside ECCE (standard capitation), AIM, CCSP and NCS, it replaces ECCE higher capitation and incorporates funding previously allocated to the discretionary Programme Support Payments (PSP) from September 2022. This distributes public funding in respect of graduate staff more fairly across ELC provision.
Changing the approach to funding ELC Graduates will:
- Extend support for the employment of Graduate Lead Educators outside of the ECCE programme to ensure that children in other parts of ELC have the opportunity to benefit from graduate-led provision.
- Allow for a Graduate Premium to be paid in respect of Managers of ELC or combined ELC and SAC services.
- Bring the financial support for Graduate Lead Educators more closely in alignment with the costs of delivery for that type of provision.
In the previous model, ECCE higher capitation had been paid on the basis of the number of children participating in the ECCE session, not the number of hours of ECCE being led by a graduate. For example, an ECCE room with 22 children received 2.75 times more higher capitation funding than an ECCE room with 8 children. In both cases, the graduate Lead Educator is providing the same amount of hours of service.
Core Funding provides an opportunity to rectify that disparity as well as extend funding for graduates beyond the ECCE programme to other aspects of ELC provision, not just in ECCE rooms as was the case with higher capitation payments.
The Graduate Lead Educator Premium in Core Funding is allocated as a top up on the number of hours of provision that is led by a graduate, rather than the number of children that are participating in that room. The Graduate Manager Premium is allocated as a top up on the number of hours of provision led by a graduate or the number of hours of operation of a service whose manager is a graduate.
It is at the discretion of the service as to how Core Funding is utilised, provided the purpose conforms to the approved areas of expenditure as set out in the Core Funding Partner Service Funding Agreement.
Core Funding is contingent upon Employment Regulation Orders (EROs) being in effect to cover all roles across the sector as defined in the Early Years' Service Joint Labour Committee Establishment Order. However, the level of funding provided is significant enough to achieve a substantial improvement in levels of staff pay and 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.
In fact, analysis of ECCE services’ income against staff costs as determined by the draft ERO rates shows that the proposed ERO minimum rates are affordable for services that choose not to avail of Core Funding, and even more so for those that do.
In all scenarios modelled by my Officials, staff costs remain below 66% of total income, and in most cases substantially below this proportion, with ECCE income only (including AIM funding where applicable). When Core Funding income is included, staff costs as a proportion of income reduce in all cases, with a maximum proportion in services modelled of 58% but in most cases substantially below this proportion.
All of these proportions of staff costs compared to non staff costs are considerably less than the sector-wide average of 70% staff costs and 30% non staff costs. This leaves considerable additional income to cover overheads and surplus/profit and for any service that may choose to pay wages above the minimum draft ERO rates, or provide for additional non-contact hours for staff.
The transformation of the sector starts with Core Funding and the new approach will entail a shift in the relationship between the State and providers in relation to delivering ELC and SAC, with new responsibilities on both sides. Core Funding is open to all registered providers subject to their agreement to the terms and conditions of the funding.
It is my ambition that the maximum number providers choose to participate in this partnership to deliver ELC and SAC for the public good and come into contract for Core Funding. Core Funding however is optional for providers.
I look forward to working together in partnership with providers to deliver ELC and SAC services for the public good.
