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

I propose to take Questions Nos. 64 and 70 together.

Affordable, accessible, high-quality and sustainable early learning and childcare, ELC, is a key priority for the Government. I have taken numerous actions to support the sustainability of all services, including the introduction of supply-side funding through core funding, as well as the continued increase in investment in the sector, with expenditure to exceed €1 billion by 2023. Core funding, with a budget of €259 million in its first year, significantly increases income for the overwhelming majority of services and provides greater funding stability to the sector. I am delighted that 4,196 services currently have an active core funding contract, representing 94% of the sector. Applications for the scheme remain open.

The latest available information shows closures of eight services that have activated a core funding contract since the scheme began on 15 September. Three of these services self-reported their reason for closure as financial. Additional data from Tusla on ELC closures and new service registrations in 2022 showed that the number of net closures was lower in 2022 than in previous years. In 2022, 141 ELC closures were notified to Tusla, with 83 new service registrations, or 58 net closures. This compares with 76 net closures in 2021, 106 in 2020 and 103 in 2019. There is considerable diversity among the reasons given for closure by providers. While some services have closed for financial reasons such as reduced demand, many have closed for other reasons such as the retirement of the owner and manager. I have been unequivocal in saying I do not want any services to be faced with financial sustainability issues and I am fully committed to working with all services to support them in delivering early learning and childcare for the public good.

While core funding has significantly increased income for the overwhelming majority of services, a number of measures have been put in place to ensure all services are sufficiently supported in the transition to this new funding model. A funding guarantee has issued to services that may see a small reduction in income due to changes to the funding approach from last year. That affects 60 services that have had their core funding topped up to match last year's higher capitation and programme support payment. Additionally, I have initiated an independent financial review of sessional services to provide greater insight and evidence that may underpin development to core funding in year 2. This independent review will involve an in-depth examination of participants' financial circumstances through the provision of detailed information on income and expenditure and an analysis of the impact of the early learning and childcare funding streams. Expressions of interest are live to seek participation in the services.

In budget 2023, I secured an overall increase in the allocation for year 2 of core funding to €287 million.

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