Dáil Éireann Debate, Tuesday - 5 December 2023
464. Deputy Fergus O'Dowd asked the Minister for Children, Equality, Disability, Integration and Youth to respond to concerns raised in correspondence (details supplied) in respect of the core funding model; and if he will make a statement on the matter. [53390/23]
View answerCore Funding, which commenced in September 2022, is a grant to Early Learning and Care (ELC) and/or School Age Childcare (SAC) providers towards their operating costs. 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.
All Partner Services that had an active Core Funding Contract during the 2022/2023 Programme Year must provide validated Financial Returns as per their Core Funding Partner Service Funding Agreement.
Core Funding payments to providers must run on a programme year, September-August, in line with the school year, the operation of the ELC and SAC sector, and the payments made to providers under the other DCEDIY schemes. Therefore, the financial returns cover the period from 1st September 2022 to 31st August 2023 and must be submitted by an accountant from a registered practice or a registered professional body (ACA, ACAA, CPA, and CIMA), on behalf of each Partner Service.
My Department is not requesting audited accounts, Partner Services are instead being asked to provide financial information mapped to the Core Funding Chart of Accounts, which has been reviewed, signed off and submitted by an accountant.
Services that already use accountancy packages should be able map to the Core Funding nominal codes from the Chart of Accounts. However, if a service does not use an accountancy package, a series of resources have been designed to assist services with meeting this requirement.
My officials have, in recent weeks, engaged with the Early Learning and Childcare Stakeholder Forum (ELCSF) on issues raised by providers on the financial reporting requirements under Core Funding.
To date, four meetings have taken place on 7th, 20th, 27th November and on 1st December involving members and nominees from Childhood Services Ireland (CSI), Childminding Ireland, Early Childhood Ireland (ECI), the Association of Childhood Professionals Ireland (ACPI), the Federation of Early Childhood Providers (FECP), the National Childhood Network (NCN), the National Community Childcare Forum and Seas Suas as well as representatives from City/County Childcare Committees (CCC) and Pobal.
Arising from these meetings, officials have developed and discussed proposals to significantly simplify and streamline the reporting requirements under Core Funding and to support providers in preparing and submitting these returns. They are now in the process of finalising updated financial reporting requirements and templates, which will be shared with members and nominees of the ELCSF in advance of publication. Once finalised, updated financial reporting requirements will be shared with providers and all communications, including templates and training material will be updated.
My Department acknowledges that there is additional administration for providers with the introduction of new schemes such as the NCS and Core Funding, and has allocated €32.13 million for administration under Core Funding in year two, and €35.34m for the third year of the scheme. In addition, a number of targeted supports are being considered by my Department to enable Core Funding Partner Services to comply with the financial reporting requirement.
With regard to increased funding for the sector, as announced in Budget 2024, the allocation for Core Funding in Year 3 will be increased by 15% - rising from €287m to €331m.
The additional funding being made for Year 3 of Core Funding, €9.27m will allow for 3% increases in capacity in the sector in year three of the scheme, driven both by new services joining the sector and existing services offering more places and/or longer hours to families. There will also be increases to the allocations for administration (of €3.21m) and non-staff overheads (of €10.07m) to ensure that the scheme is adequately responding to cost pressures. The precise allocation of the remaining €21.49m will be determined by data emerging from Year 2 of the scheme as well as the Financial Returns. It is intended that, in conjunction with the targeted measures introduced in September 2023, these measures will improve the financial standing of services receiving the lowest incomes and will pave the way for further negotiations to improve staff pay and conditions.
In any instances where a service is experiencing financial difficulty, they can reach out to their local City/County Childcare Committee and avail of Case Management Supports. This can include operational supports as well as financial supports through Sustainability Funding if deemed appropriate.
