Brian Leddin (Limerick City, Green Party)
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84. To ask the Minister for Children, Equality, Disability, Integration and Youth if he will provide an update on take-up of the transition payment for early years providers; how effective has the payment been in ensuring financial stability; if he expects similar take-up of core funding; and if he will make a statement on the matter. [36742/22]

Brian Leddin (Limerick City, Green Party)
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I wish to ask the Minister if he will provide an update on take-up of the transition payment for early years providers, how effective has the payment been in ensuring financial stability, if he expects similar take-up of core funding; and if he will make a statement on the matter.

Roderic O'Gorman (Dublin West, Green Party)
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Ensuring financial stability of early learning and childcare services is a priority of Government, as demonstrated by State supports provided to the sector throughout the pandemic that were in excess of €1 billion.

A transition fund is now in place to support providers between May and August 2022.

This fund is designed to support the financial stability of services in the period between the end of Covid-19 supports and ahead of the introduction of the new core funding scheme this September while ensuring that fees to parents do not increase.

I am pleased that approximately 96% of providers have signed up to the transition fund. One measure of financial stability of the sector is the number of services that open and close. Current data on service closures and openings are not markedly different to the trend in previous years. Moreover, the data on service closures identify the wide range of reasons for these closures as reported by providers themselves, including retirement of owners or other personal circumstances. Only a minority are reported to be related to financial stability.

These data indicate that the Covid-19 supports and the transition fund have proven successful in providing financial stability to the sector. The main contractual requirement for the transition fund is that fees remain at or below September 2021 levels for the duration of the scheme. This has provided important financial stability to parents. I am encouraged that providers have shown such willingness to work in partnership with the State toward the shared goal of delivering affordable early learning and childcare for families. The high uptake of the transition fund bodes well for the introduction of core funding in September. This is further underscored by the fact that 89% of providers have now completed a survey, which is the first step to coming into contract for core funding. Core funding is open to all eligible providers, subject to their agreement to the recently published funding agreement. Becoming a core funding partner service is, of course, optional but I look forward to a very high proportion of providers becoming partner services.

Brian Leddin (Limerick City, Green Party)
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I welcome the Minister's answer. I can see that a lot of work has gone into ensuring the financial stability of the early learning and childcare services sector.

I have been contacted by many parents in my constituency in Limerick who are extremely worried about the availability and affordability of the early years schemes. It is reassuring that so many service providers have signed up to the transition fund scheme because it gives a guarantee to parents and carers that fees will not increase above those that were charged in September 2021.

I have also been contacted by many providers in my constituency that want to provide the best service possible for children and their parents, and at the same time ensure that their staff are paid well and have security of income for 52 weeks a year. I thank the Minister for engaging with me and some of the providers and taking on board their worries and challenges. Do I have another minute?

Denise Mitchell (Dublin Bay North, Sinn Fein)
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No, the time is up.

Brian Leddin (Limerick City, Green Party)
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I thought I had two minutes in this slot.

Denise Mitchell (Dublin Bay North, Sinn Fein)
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No. The Minister has two minutes and Deputy Leddin has one. He will get another opportunity to come back in.

Roderic O'Gorman (Dublin West, Green Party)
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We had a useful visit to a number of providers in the Deputy's constituency. We were in King's Island and we saw the benefits of early learning and care for young children, in particular from vulnerable areas. We spoke about the additional supports that new funding like the core funding can provide to those services. We know this year that a number of services have registered with Tusla to say they will be expanding their offering come this September. That is important because we want core funding to be in a position to deliver additional places. The Deputy is correct that availability is an issue. Core funding will go some way to improving the availability of services, but we also need to look to the capital programme that my Department is bringing forward. We received funding of €70 million under the national development plan, NDP, to bring forward capital funding and some of that will go on increasing capacity. There is also work in terms of local authority planning guidelines when large developments are made to ensure that the required childcare facilities are delivered. We know that they are not always delivered even though they are often a requirement of planning permission granted.

Brian Leddin (Limerick City, Green Party)
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I thank the Minister for his recent visit to Limerick, especially to King's Island, which is an important example. He mentioned that interest in the core funding is quite high. If I may, I will ask a follow-up question in that regard. I have also received some queries on the topic of core funding mainly in regard to the cohort of smaller services that provide only the early childhood care and education, ECCE, scheme. The Minister has probably been made aware of that. Some of the providers in my constituency have said that they will not be able to increase salaries and improve living conditions for their staff while also continuing to provide the same quality of service because the new funding model does not take inflation, the stagnant position regarding capitation or increases in running costs into account. Some even fear that their businesses will no longer be viable and that they will have to shut down. What can we do for this cohort of service providers to ensure that jobs are not lost, their staff are paid appropriately and that children get the best possible experience in their early education years?

Roderic O'Gorman (Dublin West, Green Party)
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The ECCE programme remains fundamental to our delivery of early learning and care. That is emphasised by the fact that we are doing an evaluation now. One outcome of that will be to put it on a statutory basis. We want to continue to support our ECCE-only services. We have announced the first year of the core funding package. We recognise that inflation is an issue. When I announced the package on budget day, it was €207 million. It is now €221 million. We increased the overall package of funding to reflect inflation. This is the first year of it and I believe that it will secure the elements of better pay for staff, as we discussed with Deputies earlier, and sustainability of services. In addition, the fee-freeze that we sought in exchange for this additional funding will begin the work of cutting costs for parents. The work will be advanced further in this year's budget through an increase in the national childcare scheme, NCS.