Claire Kerrane (Roscommon-Galway, Sinn Fein)
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114. To ask the Minister for Children, Equality, Disability, Integration and Youth if she will outline in relation to core funding, for each programme year, the total value of core funding, the amount allocated towards improving pay, and her Department's estimate of the cost to employers of implementing the employment regulation; and if she will make a statement on the matter. [8181/25]

Claire Kerrane (Roscommon-Galway, Sinn Fein)
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I want to ask the Minister about the total value of core funding and the amount of it allocated to improving pay. That is very important because we know the issues with capacity whereby some providers have the physical space but they have to close rooms because they do not have the early years educators. We have an issue with recruitment and retention. Pay is key for staff and we must make sure the early years educators are paid properly.

Norma Foley (Kerry, Fianna Fail)
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Core funding is a grant to early learning and childcare providers towards their operating costs. The primary objectives of the core funding scheme are to improve pay and conditions in the sector and affordability for parents while also ensuring a stable income for providers. Providers have flexibility in how they spend their core funding grant, provided it aligns with the approved areas of expenditure outlined in the funding agreement. However, research shows that staff costs account for approximately 70% of the total operating costs of providers.

The introduction of core funding in September 2022 brought a significant increase in investment for the sector, with €259 million of funding paid directly to providers in year one of the scheme, of which €210.8 million was entirely new funding. This funding increased to €287 million in year two and by a further 15% in year three of the scheme and now stands at €331 million of an investment. For year four of core funding, commencing this September, the core funding allocation will exceed €345 million. An additional allocation of €15 million, from September to December 2025, which equates to €45 million across the 2025-26 programme year, has been specifically ring-fenced to support employers in meeting the costs of further increases to the minimum rates of pay in the sector and is contingent on updated employment regulation orders being negotiated by the independent joint labour committee. This would bring the total year four core funding allocation to more than €390 million.

The estimated cost to employers of implementing previous employment regulation orders has been calculated based on information provided by providers. The estimated cost to services of the employment regulation orders given effect in September 2022 was approximately €55 million and was supported through the year one core funding allocation of €259 million. The estimated cost to services of the employment regulation orders given effect in June 2024 was €20.1 million and was supported by increased core funding in year two and year three allocations of €287 million and €331 million, respectively.

Claire Kerrane (Roscommon-Galway, Sinn Fein)
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I thank the Minister. The review into core funding in the programme for Government commitments is very important. I am concerned that the money being earmarked for pay is not being reflected in the pay deals. I spoke previously about my concern regarding the pay talks and the JLC process that is in place because of the way in which it is designed in terms of pay increases for early years educators. The last pay increase for early years educators amounted to 65 cent. It took 14 months to negotiate that and it ended up in the Labour Court because agreement could not be reached. My concern is about the level of funding and the percentage of core funding that is supposed to be earmarked for wages and pay, and what is coming out of that process, because it does not add up given the previous pay increase of 65 cent. I am concerned about the inefficient use of the money that was announced in the budget and how it comes to pass in terms of these talks.

Norma Foley (Kerry, Fianna Fail)
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In the past three years, core funding of almost €900 million has been provided by the Government. That is an unprecedented level of funding into this area. I hear the Deputy's concerns about issues such as rates of pay. Research tells us that at least 70% of core funding is going on pay.

The State is not the employer and therefore does not set the pay or conditions for employees in either early learning and care or school-age childcare services. In line with the provisions of the Industrial Relations Act, the joint labour committee, which involves union and employer representation and an independent chair, is independent in its functions and neither I nor the Department have a role in its statutory processes. My officials are available to support the joint labour committee in its deliberation, through the provision of information and related data. However, it is a priority to ensure that we have sufficiency of provision and that those who work in the sector are appropriately recompensed, and equally that the sector itself - the providers - is sustainable.

Claire Kerrane (Roscommon-Galway, Sinn Fein)
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I make the point again that if we want a functioning early years service for parents, children and the professionals who work in it, we have to get pay right. The JLC and pay talks granted, the last time, 65 cent, which to me is insulting, to the early years educators in the sector. If we do not get that right, we will continue to have issues with recruitment and retention and capacity. We already have about 30,000 children on waiting lists for places. In many cases, they are on waiting lists for places that do not exist and will not exist. It is not good enough, given the crisis we have in the early years sector, especially with the educators, to leave it to the JLC when it comes up with 65 cent for the early years educators, based on the fact we need a functioning early years sector for parents, children and for the professionals.

Norma Foley (Kerry, Fianna Fail)
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I hear the Deputy's concerns. Government has not been found wanting in terms of investment. Over three years, just short of €900 million has been spent. The level of funding is quite extraordinary, always with the proviso that it delivers for parents, the workers and the providers. Regarding capacity, Government is very cognisant of this issue. The Deputy will note that, in the programme for Government, a specific commitment has been made regarding, that when required, the State can intervene in the provision of service, supplementing and recognising that capacity is also being provided by the private sector. A body of work is under way on this. Early scoping is being done, as I referred to earlier. There is a poll to gather information from parents regarding where they see the logjams might exist. I am very cognisant of the issue of pay and it is a concern for me. We have seen two increases in minimum rates of pay for roles in the sector. These have positively impacted 70% and 50% of the workforce, respectively, but obviously the work is ongoing.