Written answers

Thursday, 31 March 2022

Department of Children, Equality, Disability, Integration and Youth

Early Childhood Care and Education

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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338. To ask the Minister for Children, Equality, Disability, Integration and Youth if he will address a matter raised in correspondence (details supplied) in relation to the funding model for the early years education and care sector; if he will engage with the sector in relation to same; and if he will make a statement on the matter. [17385/22]

Photo of Roderic O'GormanRoderic O'Gorman (Dublin West, Green Party)
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Core Funding is a new funding stream for Early Learning and Care (ELC) and School Age Childcare (SAC) services introduced in Budget 2022 and informed by the work of the Expert Group to develop a new funding model for ELC and SAC, outlined in Partnership for the Public Good: A New Funding Model for Early Learning and Care and School-Age Childcare.

Core Funding is a payment to providers designed to meet the combined objectives of:

- Improved quality through, among other things, better pay and conditions for the workforce;

- Supporting the establishment of an Employment Regulation Order through the Joint Labour Committee;

- Supporting the employment of graduate staff;

- Improved affordability for parents by ensuring that fees do not increase; and

- Improved sustainability and stability for services.

On 7th March I announced the rates and values for the Core Funding, and launched the online Ready Reckoner tool. The Ready Reckoner is accessible to all and is designed to give an idea of what services can expect to receive based on their characteristics. It also allows different scenarios of provision to be tested. This will show the benefits of applying for Core Funding when it is possible to do so.

Of the total of €221m in full year costs, €138 million is intended to contribute to staff costs, €25 million is for a contribution to administrative costs and €20 million is allocated to contribute to non staff costs. €38 million is allocated to contribute to support graduates to be Lead Educators across ELC and to support graduates as Managers in ELC or combined ELC and SAC services. Heretofore funding has only been available in respect of graduate Room Leaders in the Early Childhood Care and Education (ECCE) programme. The graduate premium aspect of Core Funding will encourage employment of graduates as Lead Educators across all ELC, not just in ECCE rooms as was the case with higher capitation payments.

Core Funding will support the quality of services by better enabling providers to attract and retain staff, including degree 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). Staff costs comprise approximately 70% of a service's operating costs. Core Funding makes available €138 million of new funding available to contribute to staff costs, which will be in addition to the existing income available to providers through the public funding through ECCE and the National Childcare Scheme (NCS) and parents' fees.

The precise implications of the funding for staff pay and conditions depends on the agreement of an Employment Regulation Order (ERO) by the Joint Labour Committee (JLC). However, the level of funding provided is significant enough to achieve a substantial improvement in levels of staff pay for the sector as a whole as well as the development of career frameworks. Improved terms and conditions, opportunities for progression and greater rates of staff retention are important steps to improving quality in the sector.

Core Funding will also make a contribution to non-staff overhead costs (for example, utilities, rent) that make up the remaining 30% of providers costs. In a full year, there is an allocation of €20 million for a contribution to non-staff overhead costs through Core Funding. This is the first time this type of funding has been provided.

Extra funding to support administration costs is also contained within Core Funding. This means that the budget previously allocated to Programme Support Payments, with an increased allocation, is now incorporated into Core Funding. Core Funding will make €25 million available to providers to support the costs of administrative time.

The majority of Core Funding (i.e. €183 million of the €221 million) will be distributed based on a service's capacity - opening hours, opening weeks and the age group of children for whom services are provided. The rationale for this is that these are the primary characteristics that determine the service's costs of delivery. Structuring Core Funding primarily based on capacity will support sustainability and stability for services, since they will have an allocation each year that will not fluctuate in line with children's attendance.

Core Funding will address some of the existing disparities in funding levels across ECCE and non-ECCE provision, providing funding proportionate to the age ratio of children being cared for and supporting the employment of graduate Lead Educators across ELC provision. While Core Funding will operate in addition to and alongside ECCE (standard capitation), AIM, CCSP and NCS, it replaces ECCE higher capitation and incorporates funding previously allocated to the discretionary Programme Support Payments (PSP) from September 2022.

The significant majority of ELC and SAC services will see substantial increases in income through Core Funding. It is important to state that no service will lose out because of Core Funding.

My Department has issued a funding guarantee to providers. All services will receive at least the same level of funding in Core Funding as they received from higher capitation and PSP in the 2021/22 programme year, assuming the numbers of children, graduate staff and type of service offered remains the same

Services for whom the Funding Guarantee will apply and those who will see just small increases from Core Funding are ECCE services in receipt of higher capitation for large groups of children and with high occupancy levels. Such services are currently in receipt of the highest levels of public funding relative to the staffing levels required for operating those types of services, €110-€120 per hour of service provided.

Due to the nature of ECCE provision – 15 hours per week for 38 weeks per year – even a small Core Funding allocation can take account of increased delivery costs including staffing costs.

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 and that this additional investment is best allocated by linking the quantum of funding to services with their underlying costs of delivery.

This is 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. 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.


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