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

I thank the Deputy for raising this issue, which he has done one on one with me on a number of occasions, and he has been a strong advocate for the sector. The Deputy is right that one of my goals as Minister is to reduce costs for parents, but I have always set out two other goals. My second goal is to ensure childcare professionals get properly paid, and we are about to achieve that through an employment regulation order, ERO. My third goal is to protect the sustainability of services. I want to reduce costs for parents, get better pay for staff and protect sustainability. Those are the three goals.

Core funding is the new funding stream to support the delivery of early learning and care, ELC, and school age childcare, SAC, for the public good, quality and affordability for children and families, sustainability and stability for providers and staff, and, importantly, accountability, transparency and value for money for the State, considering it is an investment of €221 million in the first year. Services that sign up for core funding will become partner services, working with the State to deliver SAC and ELC. Core funding is designed to improve quality for children, including through support for better terms and conditions for staff, underpinned by that ERO, improved affordability for parents by ensuring fees do not increase and the full benefits of the national childcare scheme, NCS, are felt, and offering stability to providers with an income that contributes to the cost of delivery and does not fluctuate with child attendance.

Core funding is worth €221 million in full-year costs, and that allows for an estimated 19% increase in the total cost base for the sector in the first year. That is a significant public investment in services so that services income may now include core funding, ECCE and NCS capitation, and parental fees. Core funding will be allocated based on the capacity of services being offered. Capacity is determined by a service's opening hours, a service's opening weeks, the number of child places, and the age group of the children being cared for. These are the primary drivers of services' costs of delivery and this is, therefore, a fair, reasonable and logical method for distributing funding. Core funding is a new way of providing funding for the sector and it addresses some of the disparities in the previous system of funding. There is no solid foundation in evidence for the concerns that core funding will undermine the viability of services.

Every year a number of services close and others open. Current data show the closure trend is less than in previous years. These data also show services close for a wide range of reasons and few of those closures relate to sustainability. They are mainly to do with retirements and the like. The vast majority of services will see an increase in funding with the introduction of core funding, and less than 1% of services will see no change. No service will see a decrease in funding. For any service that experiences financial difficulties, we have put in place the safety net of the sustainability fund. This new strand of the sustainability fund is directly linked to core funding and, for the first time, it is available to private services as well as to community services.

Core funding is designed to facilitate a partnership between the State and early learning and childcare services for the public good. With 94% of services currently participating in the transition fund and associated fee management, and with 83% of services having completed the sector profile, services have already shown considerable openness and willingness to engage. I have met providers, including meeting them at the Dáil last week, and I will meet their representatives. We will continue to work, listen and engage. This is the first year of core funding and this will deliver for the entire sector.

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