Jennifer Whitmore (Wicklow, Social Democrats)
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145. To ask the Minister for Children, Equality, Disability, Integration and Youth if sufficient considerations have been given to inflationary pressures being experienced by the childcare sector; the measures and supports that will be in place to assist providers facing rising costs of providing childcare; if his attention has been drawn to the challenges facing childcare providers in terms of inflation if funding for the sector is benchmarked at 2021 levels; and if he will make a statement on the matter. [15259/22]

Roderic O'Gorman (Dublin West, Green Party)
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Ensuring improved quality, affordability and sustainability of Early Learning and Care and School-Age Childcare (ELC and SAC) services is a key priority for Government. My Department has undertaken detailed analysis of providers' operating costs and has in-depth understanding of the cost breakdown and cost drivers of ELC and SAC delivery.

As part of Budget 2022, I was pleased to announce that Government's allocation for investment in ELC and SAC this year is €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.

In a full year, €221 million will be available for providers under this new funding stream, allocated to services based on the capacity they indicate they will offer and the qualifications of those working in a service.

€183 million of the €221 million will be distributed based on the capacity that the service is offering to provide (child places, age groups, hours and weeks). This includes allocations for improvements in staff pay and conditions (€138 million), for administrative staff/time (€25 million), and for a contribution to non-staff overhead costs (€20 million).The remaining €38 million will be distributed in line with ELC graduate qualifications of ELC Lead Educators and Managers in ELC or combined ELC and SAC services.

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 and SAC employers, 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 applied; amounting to €22 million per month for ELC and SAC employers, covering, on average, 50% staff costs or 38% total operating costs. For March and April 2022 the flat rate subsidy of €100 per week 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 ‎‎Sustainability Fund for providers experiencing sustainability challenges Providers facing these challenges should contact their local City/County Childcare Committee.