Bríd Smith (Dublin South Central, People Before Profit Alliance)
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238. To ask the Minister for Children, Equality, Disability, Integration and Youth if he will clarify details in relation to the way that the once-off transition fund will work for community after-school projects and in particular services in Dublin 8 (details supplied); if it will be based on the employment wage subsidy scheme model; the way that the core funding will work; the expected criteria for core funding; the meaning of based on capacity rather than attendance in relation to core funding; if the service will continue to receive individual payments for children through the national childcare scheme; and if he will make a statement on the matter. [8828/22]

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.

1. 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

2. 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)

3. 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.