Neale Richmond (Dublin Rathdown, Fine Gael)
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146. To ask the Minister for Children, Equality, Disability, Integration and Youth if he has been in contact with small childcare providers to discuss concerns with the new core funding model for childcare; and if he will make a statement on the matter. [18510/22]

Roderic 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 support quality, sustainability, and enhanced public management, with associated conditions in relation to fee control and cost transparency, incorporating funding for administration and to support the employment of graduate staff. Core Funding aims to offer better financial sustainability to providers in return for a cultural shift to a partnership relationship between providers and the State that reflects the public good dimension of ELC and SAC.

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.

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 as well as the number of places available. This €183 million includes allocations for improvements in staff pay and conditions (€138 million), for administrative staff/time (€25 million), and a contribution to non-staff overhead costs (€20 million).

The rationale for this approach to distributing the funding 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.

€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.

Sessional services with standard capitation, Full Time, Part Time and School Age services will all see substantial increases in funding. Most ECCE services currently in receipt of higher capitation rates will also benefit significantly.

No service will lose out. I have issued a funding guarantee to ensure that no service will receive less in Core Funding that it previously received in higher capitation and programme support payments, if their circumstances remain the same. An estimated 1% of services will be caught by the funding guarantee. All other services will see increases in funding, and most substantial increases in funding.

The 1% of services for whom the funding guarantee will apply and those who will see just small increases from Core Funding are ECCE-only services in receipt of higher capitation for large groups of children and with high occupancy levels. Such services are currently in receipt of between €110-€120 per hour of service provided, which is the highest levels of public funding relative to the staffing levels required for operating those types of services and significantly in excess of average staffing costs required for this type of service.

I would also like to note that there is a sustainability fund in place where services are experiencing sustainability issues that can be availed of by services.

My officials have engaged extensively with provider representatives and providers of all types and continue to do so, via various fora.

Core Funding is designed to facilitate a partnership between the State and early learning and childcare services for the public good. Its primary purpose is to improve pay and conditions in the sector as a whole and to improve affordability for parents, as well as ensuring a fair income to providers. I look forward to working together in partnership with the many providers who which to deliver services for the public good.

Neale Richmond (Dublin Rathdown, Fine Gael)
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147. To ask the Minister for Children, Equality, Disability, Integration and Youth his views on whether childcare providers with staff with additional qualifications should receive additional funding to provide staff with increased wages on the basis of these increased qualifications; and if he will make a statement on the matter. [18511/22]

Roderic O'Gorman (Dublin West, Green Party)
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First 5, the whole-of-Government strategy for babies, young children and their families, recognises that the workforce is at the heart of high-quality early learning and care (ELC). The evidence suggests children achieve better outcomes when staff are well qualified. This is undisputed internationally. First 5 seeks to continue to build an appropriately skilled and sustainable professional workforce, and includes a commitment to achieve a graduate-led workforce by 2028.

In Budget 2022, I announced the introduction of a new Core Funding stream from September 2022. Core Funding has a number of objectives, including to support improved quality, affordability, sustainability and the achievement of the commitment to a graduate-led workforce. It will also support the introduction of an Employment Regulation Order (ERO) to determine minimum rates of pay for workers as well as conditions of employment.

Of the total of €221m in full year costs, €38m 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 school-age childcare (SAC) services. This aspect of Core Funding will encourage employment of graduates as Lead Educators across all ELC.

A graduate premium is already in operation under the Higher Capitation scheme for the ECCE programme. This has been in place since the ECCE programme was first introduced in 2010. Under Core Funding, the availability of a graduate premium is extended beyond the ECCE programme to all funded provision of ELC.

The graduate premium is specifically for those who are graduates in positions of leadership, either as Manager of a service or as lead educator with a group of children, which may also include leadership or supervision of other staff in the room. It is expected to support the commitments to the strengthening of career pathways for those working in the sector set out in Nurturing Skills, the Workforce Plan for ELC and SAC 2022-2028, which I launched last December.

Supported by the Higher Capitation payments in the ECCE programme, the proportion of staff in ELC services with a relevant degree has risen from 12% in 2012 to 34% in 2021, as reported in Nurturing Skills.

Nurturing Skills makes a number of commitments to support the move to a graduate-led workforce, including the commitment to remove the exclusive link between higher capitation payments and the ECCE programme through Core Funding.

Neale Richmond (Dublin Rathdown, Fine Gael)
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148. To ask the Minister for Children, Equality, Disability, Integration and Youth if he has engaged with childcare providers over concerns regarding the ability to pay sick and holiday pay; and if he will make a statement on the matter. [18512/22]

Roderic O'Gorman (Dublin West, Green Party)
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Providers of early learning and care (ELC) and school-age childcare (SAC) are private businesses and the State has no role in the employment of their staff, nor does my Department provide funding specifically to cover the costs of employing staff. However, providers receive income from a number of State funding schemes as well as from parental fees.

Currently, ELC and SAC providers offering the National Childcare Scheme and other Legacy Schemes are funded on the basis of attendance. These providers receive funding for public holidays occurring during the year. Providers offering the ECCE programme are required to deliver the Programme for 182 days a year, with capitation for the Programme paid for 190 days a year. This includes payment for 8 public holidays which fall within the period end August to end June (to include the new public holiday introduced this year).

The level of funding provided by my Department will rise significantly from this coming September with the implementation of the new Core Funding stream.

Holiday entitlements are set under the Organisation of Working Time Act 1997, which sets out minimum annual leave entitlements and an employee’s entitlement to public holidays. Payment for annual leave and public holidays is a requirement for all employers.

The Tánaiste is progressing the introduction of the Sick Leave Bill. It is proposed that statutory sick pay will initially be paid at 70% of regular earnings up to a cap of €110 per day, from the first day of illness for a maximum of three days per year. If the full 3 days' entitlement were used, this would equate, in percentage terms, to an additional cost for employers of around 0.8% of the annual wage of an employee receiving the average wage in the ELC and SAC sector and working full-time.

I am aware that employers in some sectors - including the ELC and SAC sector - also have to deal with the cost of replacing staff who are out sick, though this is not a new cost. The Tánaiste is setting a cap of €110 or 70% of regular earnings, to give employers certainty around the costs involved at the outset. It is also fair to employees and ensures that they receive an appropriate and predictable level of compensation if they are unable to work due to illness or injury.

The length of coverage is expected to increase over time, eventually providing for an entitlement to up to 10 working days or two weeks per year in the fourth year of the scheme’s operation.

For businesses who genuinely cannot afford to pay, included in the sick pay proposals is an ‘inability to pay’ provision. This would allow the Labour Court to grant an exemption to a business from their obligations under this legislation, for a period of not less than 3 months and not more than 12 months. There is a similar provision in the National Minimum Wage Act 2000. It would only be granted where there is a real risk to business sustainability.