Core Funding is a new supply-side funding stream available to Early Learning and Care (ELC) and School Age Childcare (SAC) providers from September . It was originally announced in Budget 2022 and is informed by recommendations of an Expert Group to design a new funding model for the sector that were adopted by Government in December.
Core Funding marks a new departure in State funding of the sector and is a significant step towards ensuring high-quality, affordable, sustainable and accessible services. It will operate from September 2022 to support improved quality, affordability, and sustainability in ELC and SAC.
Core Funding will be available to registered ELC and SAC providers, including full day care providers, ECCE-only providers, and stand-alone school-age providers, subject to the service agreeing to come into contract for the scheme. It will be a payment directly to services who choose to participate in the scheme.
The total available budget for Core Funding is equivalent to €221 million in a full programme year, contingent on an Employment Regulation Order being agreed by the Joint Labour Committee. Core Funding will be allocated to services based on their capacity and the qualifications of those working in a service. The majority of Core Funding (i.e. €183 million of the €221 million) will be distributed based on a service's capacity.
Additionally, a further €38 million will be distributed to services with ELC graduate Lead Educators/Managers through the ELC Graduate Premium. In order for a service to be allocated an ELC Graduate Premium, the person in question must be a Lead Educator in an ELC room and/or the Centre Manager of an ELC or a combined ELC and SAC service and must hold an appropriate qualification as per the Department’s Higher Capitation Qualifications list. They must also have a minimum of three years’ experience in the sector. The ELC Graduate Premium is calculated based on the number of hours of provision led by ELC graduate; and if the ELC or combined ELC and SAC service has an ELC graduate as the Manager.
A service's allocation will therefore be calculated in line with the following three elements
1. Main Base Rate
Number of child places in an age group multiplied by value based on ratio that applies to age group in table multiplied by hours of operation per week multiplied by weeks open per year
|
Age of child
|
Value of Core Funding per place per hour
|
|
|
Full-time (5+ hours per day) and Part-time (3.5 hours – 5 hours per day)
|
|
0-1 year of age
|
€1.66
|
|
1-2 years of age
|
€1.07
|
|
2-3 years of age
|
€0.92
|
|
3-6 years of age
|
€0.68
|
|
|
Sessional (up to 3.5 hours per day)
|
|
0-1 year of age
|
€1.66
|
|
1-2.5 years of age
|
€1.07
|
|
2.5-6 years of age
|
€0.65
|
|
|
School-age
|
|
4-15 years of age
|
€0.55
|
2. Graduate Lead Educator Premium
Number of rooms led by a graduate multiplied by hours per week multiplied by weeks open per year multiplied by Graduate Lead Educator premium rate of €4.44, with a maximum of one Graduate Lead Educator premium per ELC room.
3. Graduate Manager Premium
Hours of operation per week multiplied by weeks per year the service operates multiplied by Graduate Manager premium rate of €4.44, with a maximum of one Graduate Manager premium per service.
The structure of Core Funding is based on the recommendations of the Expert Group outlined in Partnership for the Public Good: A New Funding Model for Early Learning and Care and School-Age Childcare. Structuring Core Funding primarily based on capacity means that services will have an allocation each year that will not fluctuate in line with children's attendance.
Core Funding is designed to operate alongside the existing funding schemes, including the Early Childhood Care and Education (ECCE) programme and the National Childcare Scheme (NCS). Therefore, the NCS will continue to provide subsidies for children in attendance and ECCE will continue to provide capitation.
Services will be required to offer the NCS and/or the ECCE programme to all eligible children/parents, in line with their operations, and will be invited to report on the quality development measures they are pursuing.
A Ready Reckoner to support services to determine the potential value of Core Funding to their service is available at earlyyearshive.ncs.gov.ie/ReadyReckoner/.
Participation in Core Funding for ELC and SAC providers will require a commitment not to increase fees to parents from September 2021 rates in return for the increased State funding. This feature of the scheme will ensure that parents feel the affordability benefits of the NCS and ECCE, including the full effects of the NCS reforms announced in Budget 2022 .
Budget 2022 also announced a once-off Transition Fund which will be available to ELC and SAC services from May to August inclusive, during the period between the ending of the Employment Wage Subsidy Scheme (EWSS) in April and the introduction of a new Core Funding stream in September. The primary conditionality of the Transition Fund is that fees to parents do not increase above September 2021 levels.
The introduction of fee management measures is one of the recommendations of the Expert Group, as approved by Government. Fee management will start with a requirement for providers to maintain fees at or below September 2021 levels to access the new Core Funding scheme and Transition Fund, as outlined above. Further information on proposed fee management mechanisms in the longer term is available in the Group's report, available at: first5fundingmodel.gov.ie
Providers who have increased their fees above September 2021 levels will be required to revert to September 2021 levels before May 2022 to be eligible for the Transition Fund in May 2022. Similarly, to be eligible for the new Core Funding stream, providers who have increased their fees above September 2021 levels will be required to revert to September 2021 levels before September 2022.
These measures were announced as part of the Budget in October 2021, meaning that services did not have the opportunity to raise their fees in advance of the reference period for the fee freeze after the announcement.
Budget 2022 also confirmed that ELC and SAC employers will continue to benefit from the exemption to the turnover rule for the EWSS until April 2022, in part to avoid the additional costs arising from public health measures being passed on to parents.
The EWSS has been available to employers in the sector since August 2020. Enhanced EWSS rates (from October 2020-January 2022) amount to approximately €34 million per month for the sector, covering on average 80% of payroll costs and 50% of total operating costs for providers. Standard EWSS (from August 2020-October 2020 and for February 2022) amount to approximately €22 million per month for the sector, covering on average 50% of payroll costs and 38% of total operating costs for providers. A new EWSS flat rate of €100 that will apply from March-April 2022 will amount to approximately €11 million per month for the sector, covering on average, 25% staff costs or 11% total operating costs.
Given the level of investment being made available to the sector through EWSS, it is difficult to see any justification for an increase in fees at this time.
Sustainability Funding also continues to be available to providers where there are sustainability difficulties and I have requested that providers would exhaust this route before considering increases in fees for parents. I encourage providers to contact their local City/County Childcare Committee if they require any further information or support.
Core Funding is part of Government’s commitment to realising the First 5 target of investment of approximately €1 billion by 2028. Core Funding introduces a strategic way of funding the sector and begins to implement the recommendations of the Expert Group to develop a new funding model.
