Dáil Éireann Debate, Wednesday - 11 May 2022
199. Deputy Alan Farrell asked the Minister for Children, Equality, Disability, Integration and Youth if his Department has considered the rise in the cost of living in the context of capping childcare fees due in September 2022; and if he will make a statement on the matter. [23522/22]
Amharc ar fhreagraEnsuring improved quality, affordability and sustainability of Early Learning and Care and School-Age Childcare (ELC and SAC) services is a key priority for Government. My Department has undertaken detailed analysis of providers' operating costs and has in-depth understanding of the cost breakdown and cost drivers of ELC and SAC delivery.
As part of Budget 2022, I was pleased to announce that Government investment in ELC and SAC next year will reach €716 million.
From September 2022, a major new funding stream - Core Funding - will be introduced. Under the new funding stream, in return for a commitment that fees to parents will not increase, providers will be supported in meeting their operating costs, including increased costs related to improved quality measures.
It is important to support services with staff costs, which comprise approximately 70% of a service's operating costs. In this respect, Core Funding includes allocations for improvements in staff pay and conditions (€138 million) and for administrative staff/time (€25 million). Employer costs are factored in to the staff costs allocation in Core Funding. A further €38 million will be distributed in line with ELC graduate qualifications of ELC Lead Educators and Managers in ELC or combined ELC and SAC services.
Core Funding will also make a contribution to non-staff overhead costs (for example, utilities, rent) that make up the remaining 30% of providers costs. In a full year, there is an allocation of €20 million for a contribution to non-staff overhead costs through Core Funding. This includes an increase since the original allocation was announced in the budget.
The significant majority of ELC and SAC services will see substantial increases in income through Core Funding. It is important to state that no service will lose out because of Core Funding.
Budget 2022 also announced that the Employment Wage Subsidy Scheme (EWSS) would continue to be available to the ELC and SAC sector. Employers in the sector were entitled to access the EWSS, with an exemption from the requirement to demonstrate the drop in turnover that applies to other sectors, from August 2020 until the end of April 2022.
A Transition Fund is now in place to support providers between the end of the EWSS and the introduction of Core Funding. The main conditionality of access to the Transition Fund will be that services do not increase the fees charged to parents above September 2021 levels. The sum paid to each service under the Transition Fund will depend on the service’s capacity, location, and service type.
The introduction of fee management measures is one of the recommendations contained in the Expert Group report, Partnership for the Public Good: A New Funding Model for Early Learning and Care and School-Age Childcare, as approved by Government. Fee management will start with the requirement for providers to maintain fees at or below September 2021 levels to access Core Funding in 2022. Further information on proposed fee management mechanisms in the longer term is available in the Group's report, available here: first5fundingmodel.gov.ie/report/
Where providers require further financial assistance in addition to current supports available, the Department operates a Sustainability Fund for providers experiencing sustainability challenges. Providers facing these challenges should contact their local City/County Childcare Committee.
