Catherine Murphy (Kildare North, Social Democrats)
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514. To ask the Minister for Children, Equality, Disability, Integration and Youth if he will clarify the situation in respect of fee caps being linked to core funding in the early child education sector; if providers will lose funding if they fail to sign up to fee caps; and if he will provide the advices he received in respect of this direction. [16634/22]

Roderic O'Gorman (Dublin West, Green Party)
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One of my top priorities in Government is to improve affordability for parents. The package of measures announced in Budget 2022 is designed to ensure that fees to parents do not increase and that the full affordability benefits of the National Childcare Scheme (NCS) are felt without being absorbed in fee increases.

On 7 December, I was pleased to launch a report on a new funding model for Early Learning and Care (ELC) and School-Age Childcare (SAC), Partnership for the Public Good. This report was delivered by an Expert Group which was independently chaired and comprised national and international experts. The recommendations of the Expert Group are designed to deliver quality for children, affordability for parents, stability for providers, and support employers to improve pay and conditions for staff.

In Budget 2022 I secured a financial commitment for the introduction of a new Core Funding stream for ELC and SAC services to support improved quality, affordability, and sustainability. This Core Funding stream, which was recommended by the Expert Group, will become available from September 2022 and will be worth up to €73.5 million in 2022 and up to €221 million in a full year from 2023 on.

Core Funding will require a commitment not to increase fees to parents from the September 2021 rates. This means that parents will not be faced with fee increases, and the full affordability effects of the NCS, and the universal Early Childhood Care and Education (ECCE) Pre-school Programme, will be felt by parents.

Providers who do increase their fees will be required to revert to September 2021 levels on or before September 2022 in order to be eligible for the new Core Funding stream.

In advance of the introduction of the Core Funding Stream, a Transition Fund will be available to providers from May to August, also contingent on an agreement not to increase fees from September 2021 levels. This fund will operate from the end of the Employment Wage Subsidy Scheme (April 2022) until the introduction of Core Funding and make available up to €6.4 million per month to providers.

The introduction of fee management measures is one of the recommendations of the Expert Group, as approved by Government. Fee management will start with the requirement for providers to maintain fees at or below September 2021 levels to access Core Funding in 2022. Further information on proposed fee management mechanisms in the longer term is available in the Group's report.

The work of the Expert Group was informed by an extensive programme of stakeholder engagement, a programme of research on international practice, research on the ELC and SAC costs incurred by families in Ireland, reviews of the costs of delivering services in Ireland, and a range of other inputs.

I am grateful to the wide range of individuals and organisations that took part in this programme of stakeholder consultation and engagement, including parents, providers and the workforce. Phases 2 and 3 of the consultation process used the Early Learning and Childcare Stakeholder Forum as its reference group which include a large number of provider organisations. Approaches to fee management were discussed throughout the programme of consultation, particularly during the Phase 2 sessions on Parental Affordability and Partnership between the State and Services.

All material relating to the work of the Expert Group, including their report, research papers and all outputs from stakeholder consultation, are available on a dedicated website, www.first5fundingmodel.gov.ie.

The introduction of the requirement to maintain fees at or below September 2021 levels to access the very substantial levels of new funding means that parents will not be faced with fee increases, and the full affordability effects of the NCS, the NCS reform announced in Budget 2022 and indeed any reforms to the NCS in future Budgets can be fully realised.