Dáil Éireann Debate, Monday - 11 September 2023
1450. Deputy Alan Dillon asked the Minister for Children, Equality, Disability, Integration and Youth if he will outline the reason Childcare service providers are not allowed to increase their fees, even though they are facing rising costs, wages continue to increase in line with the ERO; and if he will make a statement on the matter. [38615/23]
View answerCore Funding, introduced in September 2022, is designed to meet the combined objectives of:
• Improved affordability for parents by ensuring that fees do not increase;
• Improved quality for children through better pay and conditions for the workforce by supporting agreement on an Employment Regulation Order through the Joint Labour Committee and supporting the employment of graduate staff; and
• Improved sustainability and stability for services.
Core Funding is paid directly to providers and operates alongside the early learning and childcare subsidies - National Childcare Scheme (NCS) and the Early Childhood Care and Education programme (ECCE). It constitutes additional income for providers on top of funding for these schemes, as well as income from parental fees.
Core Funding in year 1 resulted in a €259 million increase in public investment in the sector. For year 2 of the scheme, the Core Funding budget will increase by 11% to reach €287 million.
The levels of Core Funding in the sector are such, that even substantial increases in the total cost base related to both pay and non-pay costs, can be absorbed by services participating in Core Funding. This therefore, maintains the conditions necessary for the ongoing implementation of fee management in a sustainable manner.
In year one and year two of Core Funding, fee management is effectively a fee freeze, where providers cannot increase the fees charged from September 2021. This ensures that parents’ costs do not increase and that the increased NCS subsidies are fully felt by parents.
My Department uses the most recent data available to allocate Core Funding. Data emerging from current operations of services from March 2023 as well as the most up-to-date macroeconomic projections underpinned the allocation model for year 2 of the scheme.
More data will be available to my Department through the validated financial returns, which will be gathered in Quarter 4 2023, and will allow further analysis of provider income and costs. This financial return data may underpin developments in fee management for Core Funding in year 3.
I do not want any services to be faced with financial sustainability issues and I am fully committed to working with any such service to support them in delivering early learning and childcare for the public good. There are supports, financial and otherwise, available to services who need them.
Sustainability funding is available to Core Funding services, community and private, who are experiencing financial difficulty. These services can be assisted through the case management route to ensure their services remain sustainable.
I strongly encourage services which are experiencing financial difficulty, and would like support to contact their City/County Childcare Committee (CCC) to access case management supports. Services can be assisted on an individual basis through this route.
