Catherine Murphy (Kildare North, Social Democrats)
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170. To ask the Minister for Children, Equality, Disability, Integration and Youth if he has engaged with representatives of owners of childcare facilities in the context of mitigating cost inflation of services and ways to reduce the need to increase costs for parents using ECCE and creche services. [8620/22]

Roderic O'Gorman (Dublin West, Green Party)
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Ensuring improved affordability of Early Learning and Care and School-Age Childcare (ELC and SAC) for parents is a key priority for Government. I am also very conscious of the pressure that ELC and SAC providers are under regarding their operating costs. 

As part of Budget 2022, I was pleased to announce that Government investment in ELC and SAC next year will reach €716 million.

From September 2022, a major new funding stream - Core Funding - will be introduced. Under the new funding stream, in return for a commitment that fees to parents will not increase, providers will be supported in meeting their operating costs, including increased costs related to improved quality measures. The funding will support the quality of services by better enabling providers to attract and retain qualified staff; establish career structures; introduce or improve other features of provision that are demonstrated to contribute to quality (e.g. non-contact time, planning, training, curriculum implementation). It is important to support services with staff costs, which comprise approximately 68% of a service's operating costs. Core Funding will also contribute to cost increases related to non-staff costs (for example, utilities, rent).

Core Funding will ensure that services remain sustainable in the context of a commitment not to increase fees. In a full year, €207m will be available for providers under this new funding stream.

Budget 2022 also announced that the Employment Wage Subsidy Scheme (EWSS) would continue to be available to the ELC and SAC sector.  Employers in the sector have been entitled to access the EWSS, with an exemption from the requirement to demonstrate the 30% drop in turnover that applies to other sectors since August 2020. Between October 2020 and January 2022 the enhanced rate of EWSS equalled €34 million, per month, for ELC providers, covering, on average, 80% staff costs or 50% total operating costs. 

From 1 February 2022, the original two-rate structure of €203 per week and €151.50 per week applies; this amounts to €22 million per month for ELC providers, covering, on average, 50% staff costs or 38% total operating costs.

For March and April 2022 the flat rate subsidy of €100 per week will apply and the scheme will end on 30 April 2022; this amounts of €11 million per month in the sector, and will cover, on average, 25% staff costs or 11% total operating costs.

Between the end of the EWSS and the introduction of Core Funding, a Transition Fund will be in place to support providers. The main conditionality of access to the Transition Fund will be that services do not increase the fees charged to parents above September 2021 levels. The sum paid to each service under the Transition Fund will depend on the service’s capacity, location, and service type.

Where providers require further financial assistance in addition to current supports available, the Department operates a Covid-19 Impact Support Scheme. This is additional to the existing financial supports and is to support the sustainability of ELC and SAC services who may be left with short-term sustainability concerns due to lower attendance or higher costs arising from Covid-19. This scheme supports services to remain open without increasing fees to parents or guardians.

‎‎Sustainability Funding also continues to be available to providers where there are sustainability difficulties and I have requested that providers would exhaust this route before considering increases in fees for parents. I encourage providers to contact their local City/County Childcare Committee if they require any further information or support: myccc.ie/. 

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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171. To ask the Minister for Children, Equality, Disability, Integration and Youth the steps that are being taken to ensure that all community after-school services will continue to deliver the vital services in their localities as the national childcare service model and its funding plan is implemented. [8693/22]

Roderic O'Gorman (Dublin West, Green Party)
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My Department does not provide early learning and care or afterschool services.  Services are required to register with Tulsa and can then apply for funding under various funding schemes administered by my Department.  The National Childcare Scheme, or NCS, provides financial support for many parents to help with childcare costs.

The NCS provides universal and income-assessed subsidies to parents.  

The NCS is designed to be highly inclusive and to meet the needs of those families who need it the most. The NCS is based on the principle of progressive universalism and has regard to the best interests of children.

Currently a universal subsidy of 50cents per hour is available for children up to three, for up to 45 hours per week and an income-assessed subsidy is available for children of all ages for up to 45 hours per week, the level of which is determined by the family’s income. 

Following Budget 2022, two significant reforms will be introduced to the operation of the National Childcare Scheme (NCS) in the coming months. It is intended that these reforms will make it possible for significantly more families to benefit from the NCS.

The first change is the discontinuation of the practice of deducting hours spent in ECCE or school from the entitlement to NCS subsidised hours from Spring 2022. With this change, parents will be able to avail of all NCS subsidised hours regardless of time spent in school or ECCE.   This will be of particular benefit in reducing the cost of after-school services to parents, which will in turn support the sustainability of community after-school services.

The second reform relates to the universal subsidy. This will be made available to all families with children up to the age of 15 from September 2022. Parents do not have to undergo an assessment to avail of this subsidy. The universal subsidy provides €0.50 cent per hour towards the cost of a registered place up to a maximum of 45 hours a week, which totals €1,170 per annum.

Furthermore, from September 2022, a major new Core Funding stream will be introduced. Under Core Funding providers will be supported in meeting their operating costs, including increased costs related to improved quality measures, in return for a commitment that fees to parents will not increase.  The commitment not to increase fees will ensure that the full affordability benefits of the ECCE programme and the NCS are felt by parents.

 €69 million is being made available for Core Funding next year, equivalent to €207 million in a full year.  This is an estimated increase of 16% in the total annual income to the sector.

In advance of the introduction of Core Funding, a Transition Fund will be available to providers, also contingent on an agreement not to increase fees from September 2021 levels.  This fund will operate between May and August 2022 between the end of the Employment Wage Subsidy Scheme (April 2022) and the introduction of Core Funding (September 2022).

This package marks the beginning of an important and transformative multi-annual investment programme.  It achieves significant progress on the commitment to increase spending on ELC and SAC and will deliver substantial improvements in affordability, quality, inclusion and sustainability.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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172. To ask the Minister for Children, Equality, Disability, Integration and Youth if his attention has been drawn to the fact that the providers of community after-school services believe that the implementation of the national childcare service funding model of 50c per hour per child will lead to the closure of many such services and thus affect the education and well-being of nearly 500 children in Dublin 8; if there are proposals forthcoming which will help plug the funding gap; and if he will make a statement on the matter. [8694/22]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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173. To ask the Minister for Children, Equality, Disability, Integration and Youth if he will ensure (details supplied) which comprises of projects delivering vital after-school supports within communities to over 500 children from highly marginalised areas which face multiple inequities including educational inequality and poverty that their access to after school services will not be negatively affected by the forthcoming changes in funding model of such services especially with the employment wage subsidy scheme about to conclude in April 2022. [8695/22]

Roderic O'Gorman (Dublin West, Green Party)
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I propose to take Questions Nos. 172 and 173 together.

The recommendations of an Expert Group on a new funding model for Early Learning and Care and School-Age Childcare (ELC and SAC) were adopted by Government in December. The new funding model marks a new departure in State funding of the sector and is a significant step towards ensuring high-quality, affordable, sustainable and accessible services.

Budget 2022 has ensured an additional €78m for ELC and SAC, which will support my Department to introduce a range of new measures in the upcoming year. The Expert Group report informed this package of measures for the sector. The report emphasises the importance of a unified approach across the sector – both Early Learning and Care and School-Age Childcare – and this will be applied in the new funding model.

Among these measures are reforms to the National Childcare Scheme (NCS), which will be of significant benefit to many parents.

Specifically, the practice of deducting hours spent in the Early Childhood Care and Education (ECCE) programme or school from the entitlement to NCS subsidised hours will be discontinued in 2022.

Where both parents in a household are in work or study, eligible families can receive a subsidy for up to 45 hours per week and, for households where a parent is not in work or study, they can receive up to 20 hours per week of subsidy. Currently, where a child is in ECCE or school, these hours are subtracted from their entitlement to NCS subsidised hours.

With the change announced in Budget 2022, parents will be able to avail of all NCS subsidised hours regardless of time spent in school or ECCE.

It is anticipated that this will benefit an estimated 5,000 children from low-income families.

Additionally, the NCS universal subsidy will be extended to all families with children under 15 years of age. This is a significant expansion of the NCS, as currently the universal subsidy is available to children between the ages of 24 weeks and 36 months, and is payable for a child who is older than 36 months but does not yet qualify for ECCE. The extension of the universal subsidy will benefit up to 40,000 children.

These changes to the NCS were will increase the overall number of subsidised hours available to families with school-aged children, and may make SAC a more attractive option for parents.

Additionally, a new Core Funding stream will operate from September 2022 to support improved quality, affordability, and sustainability. Core Funding will be available to registered ELC and SAC providers, including full day care providers, ECCE-only providers, and stand-alone school-age providers, subject to the service agreeing to come into contract for the scheme.

The new Core Funding stream for both ELC and SAC services to support improved quality, affordability, and sustainability and the establishment of an Employment Regulation Order, will be worth up to €69 million in 2022 and up to €207 million from 2023 on. Participation in Core Funding will require services not to increase fees to parents from the September 2021 rates.

The calculation of the value of Core Funding to an individual provider will be predominantly based on the level of capacity that they commit to offering during the contract period, meaning providers will have a stable income source based on the service they deliver. The value of Core Funding to a provider will also depend on the qualifications of those working in the service.

Prior to the introduction of Core Funding, a Transition Fund will be available to ELC and SAC services from May to August inclusive, to support services during the period between the phasing out of the Employment Wage Subsidy Scheme (EWSS) in April and the introduction of the new Core Funding stream in September.

The Expert Group's report also addressed the role that ELC and SAC can play in contributing to tackling disadvantage and made a series of recommendations on how the funding model can support this goal through a combination of universal and targeted measures for services operating in the context of disadvantage.

Budget 2022 began the implementation of the Expert Group’s recommendations. Full implementation of all recommendations will be progressed in the coming years as additional funding is secured through the annual Estimates process.

I would also add that the Department oversees a Case Management process through which local City and County Childcare Committees (CCCs) and Pobal work together to assess and provide support to ELC and SAC services experiencing difficulties. This can include help with completing and interpreting analysis of staff ratios and cash flow, as well as more specialised advice and support appropriate to individual circumstances.

Financial supports, which may also be accessed through the Case Management process, are available for community services presenting with sustainability issues following a financial assessment by Pobal. All services who require support should contact their local CCC in the first instance.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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174. To ask the Minister for Children, Equality, Disability, Integration and Youth the way the once-off transition fund works for after-school services; if it will be based on the EWSS model; how the core funding will work; the criteria for core funding; what based on capacity rather than attendance means in terms of core funding; and if the services will still get individual payments for children through NCS. [8696/22]

Roderic O'Gorman (Dublin West, Green Party)
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The recommendations of an Expert Group to develop a new funding model for Early Learning and Care (ELC) and School Age Childcare (SAC) were adopted by Government in December. This marks a new departure in State funding of the sector and is a significant step towards ensuring high-quality, affordable, sustainable and accessible services.

The Expert Group report informed the transformative package of measures for the sector committed in Budget 2022.

Budget 2022 announced a once-off Transition Fund for ELC and SAC providers to be paid in the period between the cessation of the Employment Wage Subsidy Scheme (EWSS) and the introduction of the new Core Funding stream. 

Between May and August 2022, ELC and SAC providers will have access to this Transition Fund. The primary conditionality attached to access the Transition Fund will be that providers do not increase their fees above levels charged in September 2021. 

A weekly value will be determined for each service based on their location, size and service type.  Services will receive this funding in respect of the weeks during which they are open.  There will be a simple application process for providers which will be available in April.

The basis for calculating the Transition Fund will be different from the Revenue-administered EWSS. Further communications will issue to ELC and SAC providers in the coming weeks.

Budget 2022 also announced the new Core Funding stream. Core Funding will operate from September 2022 to support improved quality, affordability, and sustainability.

Core Funding will be available to registered ELC and SAC providers, including full day care providers, ECCE-only providers, and stand-alone school-age providers, subject to the service agreeing to come into contract for the scheme. It will be a payment directly to services who choose to participate in the scheme.

The total available budget for Core Funding is equivalent to €207 million in a full programme year, contingent on an Employment Regulation Order being agreed by the Joint Labour Committee. Core Funding will be allocated to services based on their capacity and the qualifications of those working in a service in line with the following three elements, with the majority of Core Funding (i.e. €172 million of the €207 million) distributed via the first of these elements:

Main Base Rate

Number of child places in an age group * Value based on ratio that applies to age group * Hours of operation per week * Weeks open per year

Graduate Lead Educator Uplift

Applied at room level, scaling in line with hours per week and weeks per year group is operating (Maximum one Graduate Lead Educator uplift per ELC room)

Graduate Manager Uplift

Applied at service level, scaling in line with hours per week and weeks per year service is operating (Maximum one Graduate Manager uplift per service)

Higher levels of funding will be available for capacity for younger children, to support the higher operating costs for these children arising from the higher staff ratio requirements.

Participation in Core Funding for ELC and SAC providers will require a commitment not to increase fees to parents from September 2021 rates in return for the increased State funding. This feature of the scheme will ensure that parents feel the full affordability benefits of the National Childcare Scheme (NCS) and the Early Childhood Care and Education (ECCE) programme. Services will also be required to offer the NCS and/or the ECCE programme to all eligible children/parents, in line with their operations.

Services will also be invited to report on the quality development measures they are pursuing.

The values for places for children of different ages offered by a service take into account the regulatory requirements. Under the Regulations, the number of places a service can offer depends on the size of rooms and the age of the children. It also depends on the number of staff present, with staff:child ratio requirements linked to the age of children. Services will declare the capacity they offer and a Core Funding value will be calculated based on that capacity.  A service’s Core Funding will then scale depending on the opening hours and weeks of the service.

The structure of Core Funding is based on the recommendations of the Expert Group on the new funding model for Early Learning and Care and School-Age Childcare. Structuring it in this way means that services will have an allocation each year that will not fluctuate in line with children's attendance. 

Core Funding is designed to operate alongside the existing funding schemes, including the ECCE programme and the NCS, subject to enhancements including those outlined above. Therefore, the NCS will continue to provide subsidies for children in attendance and ECCE will continue to provide capitation.

A Ready Reckoner to support services to determine the potential value of Core Funding to their service will be available in early March along with further communications to the sector about the funding and the full contract requirements.

The level of investment being made available for Core Funding is an acknowledgement that high quality ELC and SAC costs more than the current income to the sector. The aim of Core Funding is to allow providers’ costs to increase to improve quality but to ensure these costs are not passed onto parents in fees and that services are not made unsustainable.  

This is part of Government’s commitment to realising the First 5 target of investment of approximately €1 billion by 2028. Core Funding introduces a strategic way of funding the sector and begins to implement the recommendations of the Expert Group to develop a new funding model.