Dáil Éireann Debate, Tuesday - 13 June 2023
1077. Deputy Brendan Griffin asked the Minister for Children, Equality, Disability, Integration and Youth if childcare services core funding will be increased in line with the current rate of inflation; and if he will make a statement on the matter. [28018/23]
View answerOver the past eight budgets, investment in Early Learning and Care (ELC) and School-Age Childcare (SAC) has risen from €260 million in 2015 to € 1.025 billion in 2023, reaching the First 5 investment target 5 years ahead of schedule. This investment is a clear demonstration from Government of the value of the sector.
Core Funding, which began in September 2022, is the new funding stream to start the partnership for the public good between the State and providers. Its primary purpose is to improve pay and conditions in the sector as a whole and improve affordability for parents as well as ensuring a stable income to providers.
The original Core Funding allocation of €207m increased to €221m in Spring 2022 at a time when cost pressures were significantly increasing. This further increased to €259m based on significant capacity growth in sector in Budget 2023 with additional contributions for staff pay and conditions, non-staff overheads, administration staff/time and graduates factored in.
For the second year of operation, Core Funding will increase by €28 million, an 11% increase, to a total of €287m.
Approximately €4m of this new funding will be used to remove the experience requirement on both Graduate Premiums under Core Funding, underpinned by new EROs. This move was widely welcomed in the sector.
The remaining €24m will be used for further developments and enhancements to the scheme. €6.11m in funding has been allocated for non-staff overheads, a significant increase on the current allocation of €23m. This will facilitate the continuation of the fee freeze into the second year of the scheme, ensuring that any potential increases in non-staff costs are not passed on to parents whilst supporting services sustainability.
The majority of Core Funding is distributed to services via the base rate, based on a service's capacity - the opening hours, opening weeks and the age group of children for whom services are provided as well as number of places available.
The base rates in Core Funding have been developed using the various components associated with the cost of delivery of service provision such as; staff pay and conditions, including contact and non-contact time, holiday pay, sick pay and other employer costs; administrative staff/time and non-staff overhead costs.
The Department use the most recent data available to allocate this funding, with data emerging from current operations of services from March 2023 underpinning the recently announced allocation model for year 2, as well as the most up-to-date macroeconomic projections. This allows for the base rates under Core Funding to be set looking forward into the programme year to come, as these rates will not change during the programme year.
Although, the cost of delivery components have been used to derive the base rates the eligible areas of expenditure of the Core Funding grant are much broader. Partner Services can choose how to spend their Core Funding grant in accordance with the approved areas of expenditure outlines in the Funding Agreement.
I am committed to increasing State funding for ELC and SAC as part of a multi-annual budget process and continuing to work with Partner Services delivering early learning and childcare for the public good.
