Roderic O'Gorman (Dublin West, Green Party) | Oireachtas source

I thank the Deputy for his question and for his comments on the progress that the Minister of State, Deputy Rabbitte, and I have made in significantly increasing the budget across wide parts of this Department. It is my policy and that of this Department to welcome a variety of providers in the early years area from the large full-day services to part-time services and smaller ECCE-only services. We want a diversity of services providing early learning and care because different parents want and need different things and we want a sector that responds to that. The Department and I are sometimes accused of wanting to get rid of small providers and I want to put it very clearly on the record that this is in no way the case.

With regard to raw numbers, we are close to the end of the year now and our figures are normally a month behind. We get them from Tusla. However, in 2023 to date, we are seeing some of the lowest numbers of service closures in the last five years and some of the highest numbers of new services joining. Those are the raw figures. They are important because I am told about this mass exodus from the sector but the data does not back that particular point up.

Smaller providers, including ECCE-only providers, have particular concerns. I spoke earlier about the issue of financial reporting. That has been raised by providers across the sector over the last month or so. We have come back with a very comprehensive series of engagements between my Department and the early years forum. I hope the information we will provide in the next two days will give some comfort on that specific point.

There are questions about the level of wider administration across the early years sector. Two months ago, I announced a full review of the entire administrative process that all services, big and small, have to undertake. A team in my Department has been appointed to undertake this review. It will present me with an action plan early next year. We will start to implement that action plan and see how duplicate administration, inefficient administration and unneeded administration can be removed to make life easier for all our services. That will be particularly beneficial to those smaller services, which do not have the economies of scale associated with having large numbers of staff. I have started the process of reviewing the administration burden. We have put staff behind it. We have brought in a consultative group of providers who are experiencing these systems so that they can advise our staff. They will tell us what the problems are and what are the systems that do not work for them right now. We are getting that direct response from providers.

On the issue of funding, the Deputy will know we have brought in core funding. It is a brand-new scheme that we brought in two years ago. It has grown from an initial €200 million to approximately €330 million in its third year, starting next September. In the second year, we recognised that the one-size-fits-all model that core funding was originally based on, which looked at capacity alone, was not working everywhere so we brought forward a specific payment of €4,000 for small services and set a floor below which a service's core funding could not fall. This meant that every service would get at least €8,100. This ties into the financial reporting issue. The reason we are asking for these quite detailed returns from services is that they will allow us to understand the cost pressures different services are experiencing. They let us know what extra cost pressures ECCE-only services are experiencing versus full-day services. The more detail we get, the more we can shape the new core funding model. We have €45 million extra in core funding. We have grown the pot of core funding for year 3 by €45 million. We can use some of that money to support those smaller services and direct additional funding to them. We need the evidence for that, however. That is why we asked for this financial reporting.

We are addressing the very recently raised concerns regarding financial reporting. I hope to be able to give real clarity on that issue in the coming days. We are addressing the wider administration burdens through the action plan we are bringing forward and we have money in year 3 of core funding to continue to shape, tailor and target core funding to those services we believe need additional support. Through all of this, we will continue to see falls in the number of services closing each year and growth in the number of new services. Finally, I reiterate that we want to see a diversity of services across the sector. I hope that address the issues the Deputy has raised.