Kathleen Funchion (Carlow-Kilkenny, Sinn Fein)
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637. To ask the Minister for Children, Equality, Disability, Integration and Youth if a fee control mechanism will be introduced in advance of the delivery of the additional funding announced for the childcare sector in Budget 2022; if so, the fee control mechanism including the legal form this mechanism will take; the anticipated timing of its introduction; and if he will make a statement on the matter. [52361/21]

Roderic O'Gorman (Dublin West, Green Party)
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Included in Budget 2022 is a transformative package of measures for the early learning and childcare sector. These measures are designed to deliver quality for children, affordability for parents, stability for providers, and support employers to improve pay and conditions for staff. They include fee control measures in respect of a Transition Fund and a new core funding stream.

The allocation for early learning and childcare next year is €716 million, an increase of €78m from €638m in 2021. This excludes supports provided under the Employment Wage Subsidy Scheme (EWSS).

The new core funding stream will become available from September 2022 and is worth up to €69 million to providers in 2022, equivalent to €207.3 million for a full year.

This funding stream marks the start of a multi-annual investment plan and is part of Government’s commitment to realising the First 5 target of investment of approximately €1 billion by 2028. The new corefunding stream introduces a strategic new way of funding the sector and begins to implement the recommendations of the Expert Group to develop a new funding model.

Under the core funding stream, providers will be supported in meeting their operating costs, including increased costs related to improved quality measures. The funding will support the quality of ELC and SAC services by better enabling providers to attract and retain qualified staff, including degree-qualified staff; establish career structures; and introduce or improve other features of provision that are demonstrated to contribute to quality (e.g. non-contact time, planning, training, curriculum implementation). The new funding stream will also ensure that services can remain sustainable and will contribute to cost increases related to non-staff costs (for example, utilities, rent).

A key basis for participation in the core funding stream will be a commitment not to increase fees to parents in return for the increased State funding. This commitment not to increase fees will be central to the new core funding contract, reflecting the substantial additional investment that is being made available. Ireland is following in the steps of many other jurisdictions with the move to increase certainty for parents and for the State in respect of fees, combined with improved stability and sustainability for providers and staff, and a commitment not to increase fees is a part of this.

Further detail on other conditions, including quality requirements, will be available following the publication of the report of the Expert Group to develop a new funding model, due later this year. There will also be an extensive programme of communications with the sector in advance of the launch of the new core funding stream.

Prior the introduction of the new core funding stream, access to the EWSS, including exemption from the turnover rule, will continue for ELC and SAC employers until April 2022. The value of this exemption to the sector is estimated at €116 from November 2021 - April 2022. EWSS, in addition to other Covid-19-related supports which have been available to the sector at different points since March 2020 have allowed fees to remain broadly static during a period of considerable uncertainty.

Between May and August 2022, early learning and childcare providers will have access to a new once-off Transition Fund. Up to €5.5 million per month is available for providers to ensure there continues to be no increases in parents’ fees for early learning and childcare in the period between the end of the EWSS and the introduction of a new funding stream in September 2022.

Both the Transition Fund and Core Funding will be underpinned by contracts between the Department and providers which will set out the requirements in detail.