Fergus O'Dowd (Louth, Fine Gael)
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148. To ask the Minister for Children, Equality, Disability, Integration and Youth if he will respond to concerns raised by an organisation (details supplied); and if he will make a statement on the matter. [25256/22]

Roderic O'Gorman (Dublin West, Green Party)
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I propose to take Questions Nos. 148 and 149 together.

On 4th May I met with a delegation for the Federation of Early Childhood Providers (FECP) to discuss their position in relation to the new Core Funding stream following a survey of their members. The FECP shared extremely detailed materials at this meeting, including case studies and extensive data on provider costs. This was followed a number of days later with the letter attached to the email received by the Deputy.

There is a great level of detail contained within the various materials provided. My officials have over the past week been examining these materials in order to issue a comprehensive response to the FECP. A reply has been prepared by officials in my Department to issue to the FECP shortly.

The response to the FECP will seek further clarification on the data provided and address a number of the issues raised but I think it is important to be clear that the Department will not be accepting the proposals made by this sector representative group to extend the scope for additional optional extras or voluntary contributions to be charged to parents whose children are participating in the ECCE programme. It is my view that this risks parents incurring additional charges for a universal service which is designed and intended to be free at the point of use and available to all families, regardless of ability to pay. That would be entirely contrary to the spirit of the programme.

In examining all of the data available to the Department, including that provided by the FECP, there is no evidence about a significant lack of sustainability for ECCE-only services or to suggest that services will face closure as a result of Core Funding. The vast majority of services will see an increase in funding, and around 1% of service will see no change. No service will see a decrease in funding.

The sectoral information on income and costs does not show signs of financial unviability for ECCE-only services. In fact, the evidence suggests that ECCE-only services see the highest levels of income in excess of costs compared to other types of provision.

I am committed to ensuring more stability of income for services, and that is one of the key objectives of Core Funding.

The vast majority of services will see an increase in funding, and around 1% of service will see no change. No service will see a decrease in funding. For any service that does experience financial difficulties, a Sustainability Fund will be in place. This new strand of the Sustainability Fund, linked to Core Funding, will be designed to provide an extra safety net for providers. This will be open to both private and community providers.

The Government is committed increasing investment in early learning and care and school-age childcare. As part of this, the new Core Funding package amounts to €221 million in full year costs (€173 million of which is new investment).

Every year a number of services close and others open. Current data on service closures and openings are not markedly different to the trend in previous years. This data also shows that services close for a wide range of reasons including retirement of owners or other personal circumstances and only a small minority relate to sustainability issues.

The €221 million Core Funding budget is distributed to services in a fair and proportionate manner, based primarily on the features that determine services’ operating costs.

Importantly, Core Funding and this significant increase in investment is the vehicle through which the Government will deliver improved pay and conditions for staff through supporting the drawing up of Employment Regulation Order for different roles of the sector by the Joint Labour Committee and through introduction new mechanisms to control parental fees.

It may be of interest to the Deputy to know that there is significant material relating to Core Funding available at www.first5fundingmodel.gov.ie/Core-Funding/. This public material was prepared in response to a number of queries received by my Department, including some of which are raised by the FECP.

The new funding model being implemented aims to transform the sector to one that is increasingly publicly funded and publicly managed, delivering a service for the public good, through a partnership between the State and providers, to the benefit of children, parents, educators and practitioners, and society overall.

This transformation starts with Core Funding and the new approach will entail a shift in the relationship between the State and providers in relation to delivering ELC and SAC, with new responsibilities on both sides. Core Funding is open to all registered providers subject to their agreement to the terms and conditions of the funding.

It is my ambition that the maximum number providers choose to participate in this partnership to deliver ELC and SAC for the public good and come into contract for Core Funding. Core Funding however is optional for providers.

I look forward to working together in partnership with providers to deliver ELC and SAC services for the public good.

Holly Cairns (Cork South West, Social Democrats)
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150. To ask the Minister for Children, Equality, Disability, Integration and Youth the steps that he is taking to ensure that early childhood care and education funding is equally distributed to non-full-day care providers and full-day care providers. [25318/22]

Roderic O'Gorman (Dublin West, Green Party)
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In December 2021, Government adopted the 25 recommendations contained in an Expert Group report, Partnership for the Public Good: A New Funding Model for Early Learning and Care (ELC) and School-Age Childcare (SAC).

The new funding model will support delivery of ELC and SAC for the public good, for quality and affordability for children, parents and families. To achieve this, there is a need for greater State investment and greater public management of provision.

Core Funding is the new funding stream to start this partnership for the public good between the State and providers. 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 stable income to providers.

Core Funding is distributed in a fair and reasonable manner that is related to services’ costs of delivery. Core Funding is allocated to services based on the number of child places being made available (whether filled or not), the age group of children for whom the places are available and the number of hours the places are available for, as well as the graduate qualifications of leaders in the service. These are the primary drivers of services costs and this is therefore the most proportionate and transparent manner to allocate funding.

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.

The formula for distributing funding to services is based on the statutory adult: child ratios that underpin the type of provision being offered. Full day services are required to operate to lower adult: child ratios outside of the delivery of the ECCE programme than sessional pre-school services so consequently the allocation for this type of provision is higher on a per place, per hour basis.

In fact, the value of funding offered is weighted in favour of sessional services for 2.5-6 year-olds. ECCE services receive proportionately more than other types of services relative to the staffing requirements of sessional pre-school provision.

It is important to acknowledge that Core Funding will intentionally 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 as well as graduate Managers. Core Funding also replaces ECCE higher capitation and distributes public funding in respect of graduate staff more fairly across ELC provision.

Core Funding is related to the costs of delivery. Services opening for longer hours or offering more places will receive a higher value of Core Funding than other services. This is because their costs of operation are higher. The majority of Core Funding (i.e. €183 million of the €221 million) will be distributed based on a service's capacity - the opening hours, opening weeks and the age group of children for whom services are provided as well as 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). It is important to note that both contact and non-contact time, holiday pay, sick pay and other employer costs, are all factored in to the estimated staff costs allocation in Core Funding.

In addition, a further €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 ECCE programme. The Graduate Lead Educator Premium in Core Funding is paid as a top up on the number of hours of provision that is led by a graduate. The Graduate Manager Premium is paid as a top up on the number of hours of operation of a service whose manager is a graduate.

Structuring Core Funding primarily based on capacity means that services will have an allocation each year that will not fluctuate in line with children’s attendance. Providers will have a stable income source based on the service they deliver. Allocating Core Funding based on capacity in this way also closely links the level of funding available to the delivery costs for different types provision.

In response to queries received by my Department on a number of matters, including the impact of Core Funding on different service types, detailed information relating to Core Funding is now available at .

City/County Childcare Committees (CCCs) have received training in order to assist providers in calculating their potential Core Funding allocations. I would encourage providers to contact their local CCC for guidance and support in understanding the impacts and benefits of Core Funding for their service. Contact details for CCCs are available at myccc.ie/where-is-my-nearest-ccc and providers can reach out for support at any time.

The new funding model being implemented aims to transform the sector to one that is increasingly publicly funded and publicly managed, delivering a service for the public good, through a partnership between the State and providers, to the benefit of children, parents, practitioners, and society overall. This transformation starts with Core Funding and the new approach will entail a shift in the relationship between the State and providers in relation to delivering ELC and SAC, with new responsibilities on both sides. Core Funding is open to all registered providers subject to their agreement to the terms and conditions of the funding. It is my ambition that the maximum number providers choose to participate in this partnership to deliver ELC and SAC for the public good and come into contract for Core Funding. Core Funding however is optional for providers.

I look forward to working together in partnership with providers to deliver ELC and SAC services for the public good.