I was pleased to have secured a Budget 2022 package of €716 million for investment in Early Learning and Care (ELC) and School Age Childcare (SAC), a very significant advance on the previous year and designed to begin to introduce major changes to the model of funding the sector.
The most substantial new development in Budget 2022 was the introduction of Core Funding. Core Funding is a new funding stream designed to facilitate a partnership between the State and ELC and SAC providers for the public good. Its primary purpose is to improve pay and conditions in the sector as a whole and to improve affordability for parents, as well as ensuring a stable income to providers. 2022 will see up to €73m being made available for Core Funding, which equates to €221m in full year costs.
Core Funding will give providers a stable income source based on the nature of the service they deliver. A provider’s income will now consist of Core Funding, NCS subsidies and ECCE capitation, as well as AIM funding for those services that participate in that model, in addition to parental fees. 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 makes a contribution to 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 also makes 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.
Extensive analysis of the income and costs of providers demonstrates that the combined funding model of ECCE, NCS and Core Funding offers a substantial and attractive package to providers to cover costs, including increased costs related to quality measures, while also committing to the key conditions of Core Funding such as the fee freeze.
On the matter of capacity, the availability of high-quality ELC and SAC is a key Government priority.
To ensure that the supply of ELC and SAC places meets demand, my Department has, since 2015, funded the creation of more than 27,000 new places through an Annual Capital Programme.
Before the onset of Covid-19, national data indicated that, on the whole, supply of places was meeting demand, with evidence of undersupply for certain age groups including children under 3, and in certain areas.
Data gathered throughout the Covid-19 pandemic revealed lower demand for ELC and SAC. Indeed, data captured in June 2021 found significant vacancy rates across the country – with the national vacancy rate averaging at 21%. My Department has continued to monitor capacity, with a particular focus on monitoring Covid-19 impacts as public health restrictions have been lifted and on responding to the unmet needs of families. In April of this year, City/County Childcare Committee (CCC) undertook a nationwide survey of capacity in ELC and SAC services. This was followed in May by the Early Years Sector Profile Survey that is undertaken by Pobal annually on behalf of my Department.
Capacity data captured through the recent CCC survey and the Early Years Sector Profile Survey has been extracted and will be made available in the coming weeks. An initial analysis of these data shows the national vacancy rate at 13.3%.
In addition to these efforts to monitor capacity issues across the country, my Department is planning a range of steps to address any issue of under supply. Some €70m has been allocated to my Department through the revised National Development Plan (NDP) – with the majority of this funding earmarked for new places. Under the National Action Plan for Childminding, I have committed to opening up access to the NCS to parents who use childminders following the extension of regulation to childminders, which is expected to happen within the first 2-3 years of the Plan.
My Department, in partnership with the Department of Housing Planning and Local Government, is in the process of updating the 2001 Planning Guidelines for Local Authorities on Early Learning and Childcare Settings. In addition, City/County Childcare Committees have been mobilised to engage proactively with services to identify vacant places and to explore possibilities for expansion among services, particularly where there is unmet need.
