Marian Harkin (Sligo-Leitrim, Independent)
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135. To ask the Minister for Children, Equality, Disability, Integration and Youth if his attention has been drawn to any early years' services that have closed recently; the circumstances of those closures; and his views on the closures. [53702/22]

Roderic O'Gorman (Dublin West, Green Party)
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Every year it is normal for some early learning and care (ELC) and school-age childcare (SAC) services to close while other new services open. Services close for a wide variety of reasons including retirement of owners or other personal circumstances.

Tusla is the independent statutory regulator for the sector. Services intending to close must notify Tusla within 28 days of closure. Data from Tusla on numbers of closures in recent months show that the number of closures this year is broadly in line with other years. Reasons for closure given to Tusla by service providers that have closed suggests considerable diversity in the reasons. While some services have closed for financial or regulatory reasons, many have closed for other reasons (e.g. retirement of the owner/manager).

The tables below set out the number of closures and new registrations to end September this year along with the year to date and full year figures for 2019 to 2021. It is important to note that year on year comparison for SAC services is not useful as initial registration of SAC services was only completed in 2021.

ELC service closures and new registrations year to date and full year:

SAC service closures and new registrations year to date and full year:

Marian Harkin (Sligo-Leitrim, Independent)
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138. To ask the Minister for Children, Equality, Disability, Integration and Youth the types of funding available to ECCE, sessional early years' services; the current financial viability of those services; and if he will make a statement on the matter. [53705/22]

Roderic O'Gorman (Dublin West, Green Party)
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On 15th September, I launched Together for Better, the new funding model for early learning and childcare. This new funding model supports the delivery of early learning and childcare for the public good, for quality and affordability for children, parents and families as well as stability and sustainability for providers. Together for Better brings together three major programmes, the Early Childhood Care and Education (ECCE) programme, including the Access and Inclusion Model (AIM), the National Childcare Scheme (NCS) and the new Core Funding scheme.

Under Together for Better, ECCE sessional services who operate for 15 hours per week over 38 weeks per year can avail of ECCE capitation at a rate of €69 per registered child per week plus Core Funding at a rate of €9.75 per child place per week. Core Funding is payable whether or not the place is filled. The statutory regulations that apply for ECCE sessional services allow for a ratio of up to 11 children per adult. The ECCE scheme rules allow for up to 22 children (and two adults) in a session.

Additionally, if a lead educator of an ECCE session is a graduate with a relevant qualification and the necessary experience, an additional amount of €66.60 will be paid to the service per week. If there is a separate manager who is a graduate with a relevant qualification and the necessary experience a further €66.60 if available to the service per week.

AIM provides further investment in ECCE. Under AIM, a fully qualified Inclusion Co-ordinator (InCo) in an ECCE service receives an increase in the rate of capitation payable to the service of €2 (pro-rata), per ECCE registered child per week. For the programme call 2022/2023 to date (October 2022), 53% (2,063) of services delivering ECCE receive capitation for InCos.

Additional capitation is also paid to ECCE providers under AIM Level 7 to support inclusion of children by reducing the adult-child ratio within the ECCE room. In January 2021, the payments increased by 7% from €195 per week to €210 per week. A further increase of 7% in September 2022 increased AIM Level 7 capitation from €210 to €240 per week. For the programme call year 2022/2023 to date (October 2022), 53% (2,079) services delivering ECCE were paid for additional assistance, with a number of these services receiving more than one additional capitation.

ECCE-only services across the country form an integral part of the early learning and childcare system. Their exact operations can vary but typically, they open to children for 15 hours per week, 38 weeks per year.

Since the programme began in 2010, various developments to the ECCE programme between up to 2022 (related to capitation, ratios and non-contact time/programme support payments), demonstrate an increase in income of up to 22.6% for services without a graduate lead educator and 22% for services with a graduate lead educator. The introduction of Core Funding on top of ECCE standard capitation means up to €866.25 per week is now available for a session without a graduate lead educator (34.3% higher than in 2010) and up to €932.85 per week is now available for a session with a graduate lead educator (24.4% higher than in 2010).

The funding model for sessional services is now primarily a combination of the ECCE capitation they receive per child registered with them, including AIM, and the Core Funding grant services receive based on the capacity of their service and the qualifications levels of staff, as well as any optional extras they may charge parents such as an additional 30 minutes. A number of models of ECCE services and their associated funding are presented here:

first5fundingmodel.gov.ie/wp-content/uploads/2022/07/Early-Years-Draft-EROs_Implications-for-ECCE-sessional-services.pdf

Under Core Funding, the overwhelming majority of services will see an increase in their funding, most will see very substantial increases, and no services will see a decrease in funding if their circumstances remain the same. ECCE services without a graduate lead educator will see capitation increase by at least 9.5% through Core Funding. ECCE services with a graduate lead educator will almost all see increases in income, although it may be smaller proportionally given the significant level of funding available under the old funding model.

A very small number of services, less than 100 of the over 4,000 signed-up, will see no increase with their income matched to 2021/2022. For this small number of services who do not experience an increase, a Funding Guarantee will apply. This will top-up Core Funding payments to match the difference in ECCE higher capitation and PSP from last year, provided they offer the same amount of graduate led provision as last year. These are larger ECCE-only services – with 20+ children in a session.

With regards to financial viability, there is no evidence that the new funding model will render ECCE services unsustainable. My Department has extensive data on providers’ existing and projected income and delivery costs through data from Revenue, surveys and demographic and macro-economic information and has extensively analysed the question of sustainability.

Data available prior to the additional investment of Core Funding in the sector showed that the median surplus (income in excess of cost) for sector as a whole of 4%. However, services with the characteristics correlated with ECCE-only provision had higher levels of surplus than other types of provision – ranging from 14% to 23% depending on the characteristic.

- Do not offer full day: 17% income in excess of cost

- Do not offer wrap-around care: 16% income in excess of cost

- Open exactly 38 weeks each year: 19% income in excess of cost

- Low total numbers of childcare hours: 23% income in excess of cost

- Single-site services: 14% income in excess of cost

- Those whose only income source is ECCE funding: 19% income in excess of cost

Separately Sole Traders, which constitute a large proportion of ECCE-only provision had an average income in excess of costs of 23%.

This evidence suggests that ECCE-only services had the highest levels of income in excess of costs compared to other types of provision.

The collection of information on income and costs is essential for the full understanding of this complex and diverse sector in order to inform the development of policy. As recommended by the Expert Group, there needs to be full visibility and understanding of financial information in the sector in order to better understand the impact and interaction of income, costs, surplus and profit in the sector.

I am pleased therefore that the recent data collection for the 2021/2022 Annual Sector Profile, including questions on income and costs, has been completed by 93% of services. This new and emerging data will allow the Department to rerun income and cost analysis and ascertain the latest available financial position to inform the next policy developments.

Budget 2023 allocates €1,025m to early learning and childcare – a clear demonstration from Government of the value of the sector. Further interrogation of the new Core Funding application and income and cost data is required in order to most effectively design developments in Year 2 of Core Funding.

For any services that are experiencing difficulty and who would like support can contact their City/County Childcare Committee (CCC) to access case management supports. Services can be assisted on an individual basis through this route and it also allows for trends and themes across the country to be identified that can inform a more systematic response if necessary. My officials are not receiving any indications from CCCs that there have been providers reporting financial difficulties and in need of support. This case management process through the CCCs is the route to access additional sustainability funding if required.

Together for Better aims to transform the sector and my Department and I are committed to working constructively, collaboratively and positively with Partner Services towards a goal of delivering early learning and childcare for the public good.

Catherine Murphy (Kildare North, Social Democrats)
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139. To ask the Minister for Children, Equality, Disability, Integration and Youth if his attention has been drawn to a letter from a ECCE provider (details supplied); if he will review the core funding policy in view of the contents of the letter; his plans to increase capitation; and if he has conducted and or if he will conduct a sectoral impact review regarding the introduction of his core funding policy change. [53798/22]

Roderic O'Gorman (Dublin West, Green Party)
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I have become aware that some Early Childhood Care and Education (ECCE) providers intend to fully close, or reduce their service provision by closing their ECCE room/s, on 11 and 25 November 2022.

I do not believe that closures are justified, given the very significant additional investment secured for the sector in recent years, with funding in 2023 to exceed €1 billion. These closures will be disruptive for young children and their families and will undermine confidence in the sector.

I note that those protesting are seeking an increase in the weekly ECCE capitation from €69 to €76 per child. This level of funding is already available. Through a combination of ECCE capitation and Core Funding, ECCE providers can already avail of weekly funding of at least€78.75 per child (€69 ECCE capitation plus €9.75 per ECCE child place per week in Core Funding base rate). Where services have less than full occupancy, the effective increase on a per child basis is greater.

I would also like to clarify that, while the Higher Capitation and Programme Support Payments have been subsumed into Core Funding, no service loses out under Core Funding. Indeed, the overwhelming majority of providers substantially benefit financially from Core Funding.

I think it is also important to refute the claim of there having been only one increase in the level of ECCE capitation since the programme started in 2010. The various developments to the ECCE programme between 2010 and 2022 (related to capitation, ratios and non-contact time/programme support payments), demonstrate an increase in income of up to 22.6% for services without a graduate lead educator and 22% for services with a graduate lead educator. The introduction of Core Funding on top of ECCE standard capitation means up to €866.25 per week is now available for a session without a graduate lead educator (34.3% higher than in 2010) and up to €932.85 per week is now available for a session with a graduate lead educator (24.4% higher than in 2010). The excludes other funding for ECCE providers, attached to the Access and Inclusion Model (AIM) as well as significant supports for ECCE and other providers over the course of the pandemic - estimated to cost in excess of €1 billion.

It is also important to address the issue of the fee freeze condition which has been introduced with Core Funding. This is an essential step in the implementation of the new funding model to ensure that parents are not faced with further additional costs and that the developments to the National Childcare Scheme are felt by parents rather than being absorbed by fee increases. The substantial additional investment available through Core Funding adequately compensates for this condition.

ECCE-only services across the country form an integral part of the Early Learning and Care (ELC) and School-Age Childcare (SAC) system. Their exact operations can vary but typically, they open to children for 15 hours per week, 38 weeks per year. Core Funding is distributed in a fair, reasonable and transparent manner that is related to services’ costs of delivery, contributing to both staff costs, including administration staff/time, and non-staff overheads. Consequently, services opening longer hours or offering more places will receive a higher value of Core Funding than other services as they have higher delivery costs. This is connected to the staffing requirements of ELC and SAC as set out in Regulations.

There is a need for greater visibility and understanding of financial basis on which ELC and SAC services operate, in the context of a complex and diverse sector, in order to better understand the impact and interaction of income, costs, surplus and profit. I am pleased therefore that the recent data collection for the 2021/2022 Annual Sector Profile, including questions on income and costs, will allow the latest available financial position to inform the next policy developments.

The new funding model was designed with extensive stakeholder consultation and engagement, reports of which are published. Since Core Funding was announced last year as part of Budget 2022, the Department has hosted eight meetings of the Early Learning and Childcare Stakeholder Forum (ELCSF), and several Core Funding specific meetings with the ELCSF and provider representatives. The ELCSF includes multiple sectoral organisations and representative groups, including provider representatives, such as the Federation of Early Childhood Providers (FECP), Early Childhood Ireland (ECI) and the Association of Early Childhood Professionals (ACPI). In particular, during August, September and October, there have been frequent meetings with provider representative groups in preparation for the commencement of Core Funding and to support the initial implementation of the scheme, with the most recent meeting of the provider representative groups held on 20 October. There has also been a number of formal correspondence to and from provider representative groups, as well as individual contacts. I will continue to engage with provider representative groups through the ELCSF.

ELC and SAC providers are fundamental partners in the delivery of the new funding model which is intended to improve quality for children, including through improved terms and conditions for staff; affordability and accessibility for parents; and stability and sustainability for services. As noted by an Expert Group on funding for the sector, there can be an absence of a strong parental voice in the sector and the new funding model aims to balance the interests of parents, providers, the workforce, and the State, where there is significant public investment in a privately delivered system. The new funding model has been approved by Government and is widely welcomed by sectoral representative groups advocating for parents, children, the workforce and providers. To date, 93% of providers nationally have signed up to Core Funding and this Scheme remains open to all remaining providers who wish to deliver early learning and childcare for the public good.

Together for Better, the new funding model, is about getting the most out of the three early learning and childcare programmes, ECCE including AIM, NCS and Core Funding, working together and ensuring stability and sustainability in the sector. I have been unequivocal that I do not want any services to be faced with financial sustainability issues and I am fully committed to working with any such service to support them in delivering early learning and childcare for the public good. This means accepting new responsibilities including greater public management in relation to fee management, quality improvements, and transparency in relation to operations.

Services that are experiencing difficulty and who would like support are encouraged to contact their City/County Childcare Committee (CCC) to access case management supports. The Department, Pobal and the CCCs continue to closely monitor trends concerning services entering case management and will continue to maintain the availability of Sustainability Funding for individual services at risk.

I have acted in good faith to ensure that an appropriate funding model is now in place to support the sector in a sustainable way into the future, and which can be further developed in response to analysis of emerging evidence. Significant additional investment is being made in the sector and a number of supports and safety nets are available for the small number of providers who may experience financial difficulties due to a range of factors. Together for Better, the new funding model, is already delivering substantial benefits for children, parents, staff and providers. I hope that providers who are contemplating closures will reconsider their position.