Thomas Byrne (Meath East, Fianna Fail) | Oireachtas source

Core funding, which is a significant achievement of this Government, was first introduced in September 2022. It is designed and has worked to support improved quality of provision, improved pay and conditions for staff, a fee freeze for parents and sustainability and stability of income for services. Core funding makes a significant additional contribution to services' income, allowing them to better absorb increased costs.

In year 1 of core funding, €259 million was allocated to the scheme and 99% of services that signed up to the scheme saw their income increase. Less than 1%, or close to 60 services, received top-up payments to ensure their income did not decrease for the same level of provision offered.

Core funding in its second year has a budget that has increased by 11% to reach €287 million, providing a sustainable platform for investment with increases for all services. To date, more than 94% of eligible providers have now signed up to year 2 of core funding.

This year, all services will have seen further increases to their core funding allocations from the second year due to the increased allocations towards non-staff overheads and administrative staff and time. In addition, the Government introduced a number of targeted supports for small and sessional services in year 2 of the scheme to improve sustainability of these services, specifically a flat rate top-up of €4,075 for sessional-only services and a minimum base rate allocation of €8,150. These measures saw the average allocation under core funding for sessional-only services increase by 32% this year.

Currently, through early childhood care and education, ECCE, capitation and core funding combined, services receive a minimum of €79.20 per child per week and a maximum of €95.85, with additional funding for graduate lead educators and graduate managers, with sessional only services also receiving an additional sessional-only flat rate of €4,075. In a continued commitment to supporting small and sessional services, the targeted measures introduced in year 2 of the scheme will continue to apply in the 2024-25 year.

As announced in the most recent budget, the allocation for year 3 of core funding, from September 2024 to August 2025, will increase by €44 million or 15% to €331 million. This will support the delivery of a range of enhancements in year 3 of the scheme to support improved affordability and accessibility for families, improved pay and conditions for the workforce and continued improvement in sustainability for providers. Enhancements to the targeted measures for small and sessional services, including the option to raise the minimum core funding base rate, are under consideration for year 3. Any change to the allocation model for year 3 will be informed by financial returns data due from services next month.