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Childcare Services

Dáil Éireann Debate, Tuesday - 28 June 2022

Tuesday, 28 June 2022

Ceisteanna (661, 671)

Niamh Smyth

Ceist:

661. Deputy Niamh Smyth asked the Minister for Children, Equality, Disability, Integration and Youth if he will address issues raised in correspondence by a person (details supplied); and if he will make a statement on the matter. [33671/22]

Amharc ar fhreagra

Seán Canney

Ceist:

671. Deputy Seán Canney asked the Minister for Children, Equality, Disability, Integration and Youth if he will meet with the Federation of Early Childhood Providers to address their issues around the viability of the business model as a matter of urgency; and if he will make a statement on the matter. [34471/22]

Amharc ar fhreagra

Freagraí scríofa

In December 2021, Government adopted the 25 recommendations contained in an Expert Group report, Partnership for the Public Good: A New Funding Model for Early Learning and Care (ELC) and School-Age Childcare (SAC).

The new funding model will support the delivery of ELC and SAC for the public good, for quality and affordability for children, parents and families. To achieve this, there is a need for greater State investment and greater public management of provision.

The Expert Group engaged in a widespread programme of stakeholder consultation in order to review the existing funding model for Early Learning and Childcare and develop a new funding model. Over the course of the two year project, the extensive programme of stakeholder consultation engaged with parents, providers, the workforce, and other stakeholders, all of which is documented and publicly available.

Core Funding, which begins in September, is the new funding stream worth €221 million in full year costs to start this partnership for the public good between the State and providers. 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.  Core Funding allows for an estimated 19% increase in the total cost base for the sector.  

My officials have engaged extensively with provider representatives and providers of all types, and continue to do so, via various fora, as the details of Core Funding are available. For example, on 12th April, senior officials in my Department met with a group of provider representatives to discuss issues regarding Core Funding. 

In addition, on 4th May, I, along with officials, met with a delegation from the Federation of Early Childhood Providers (FECP) to discuss their position in relation to the new Core Funding stream following a survey of their members. The FECP shared extremely detailed materials at this meeting, including case studies and extensive data on provider costs. My officials have examined these materials and issued a comprehensive response to the FECP. Furthermore, on 22nd of June I met with the FECP at Leinster House to hear their concerns.

My Department and I have engaged with providers throughout the development and implementation of the new funding model, and will continue to do so in the future. The next meeting of the Early Learning and Childcare Stakeholder Forum is scheduled for 29th June and this will serve as a useful opportunity to hear from a variety and diversity of stakeholders in the sector.  

Core Funding is a new way of providing funding for the sector and addresses some disparities in the previous system of funding.  However, I do not believe that there is a solid foundation in evidence for the concerns expressed by some that Core Funding will compromise services' viability.

In examining all of the data available to the Department, including that provided by the FECP following our meeting on 4th May, there is no evidence about a significant lack of sustainability for ECCE-only services or to suggest that services will face closure as a result of Core Funding.  

Analysis of providers’ income and costs shows that services with the characteristics correlated with ECCE-only provision had the highest levels of income in excess of costs compared to other types of provision. Levels of income in excess of costs range from 14% to 23%, depending on the characteristic chosen. These figures compare to a sector median proportion of income in excess of cost of 4%. This was prior to increases in ECCE capitation rates and does not take account of the substantial investment in services during Covid-19 or the new Core Funding income that services will be eligible for.  

Accounting for the proposed Employment Regulation Order rates currently being considered, Department estimates show that services with ECCE and Core Funding, will receive income from the State that will cover the staff costs and leave considerable room for overheads and surplus, or for any service that may choose to raise wages above anticipated new minimum rates.   

Every year a number of services close and others open. Current data on service closures and openings are not markedly different to the trend in previous years. This data also shows that services close for a wide range of reasons including retirement of owners or other personal circumstances and only a minority relate to sustainability issues. 

I am committed to ensuring more stability of income for services, and that is one of the key objectives of Core Funding.   

The vast majority of services will see an increase in funding, and less than 1% of services will see no change. No service will see a decrease in funding. For any service that does experience financial difficulties, a Sustainability Fund will be put in place. This new strand of the Sustainability Fund, linked to Core Funding, will be designed to provide an extra safety net for providers.  This will be open to both private and community providers.

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