Richard Bruton (Dublin Bay North, Fine Gael)
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118. To ask the Minister for Children, Equality, Disability, Integration and Youth the latest level of take-up of the core funding model for childcare for providers; if any need to adapt the existing suite of supports has been identified for providers who have sought additional transitional support and if he will make a statement on the matter. [56604/22]

Roderic O'Gorman (Dublin West, Green Party)
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Together for Better is the new funding model that supports the delivery of early learning and childcare for the public good. This was recommended by an Expert Group, adopted by Government, and has been widely welcomed by representative groups advocating for parents, children, the workforce and providers.

I am delighted that to date, 4,141 early learning and childcare providers have applied for Core Funding over 93% of the sector. This is a tremendous level of uptake and will make a positive impact for parents and children using these services through investment in quality and in affordability with more funding for staff and a commitment not to increase fees.

Core Funding has a budget of €259 million in full year costs for year 1 of the programme (September 2022-August 2023) to start this partnership for the public good between the State and providers.

The majority of Core Funding is 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 includes allocations for improvements in staff pay and conditions, for administrative staff/time, and a contribution to non-staff overhead costs. Contact and non-contact time, holiday pay, sick pay and other employer costs, are all factored in to the staff costs allocation in Core Funding.

In addition, further funding 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.

Core Funding allows for substantial increases in the total cost base for the sector, related both to pay and non-pay costs, without additional costs being passed on to parents.

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. A very small number of services, approximately 60 of the over 4,100 signed-up, will receive 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.

The new funding model comes after the substantial Covid-19 supports of approximately €1bn provided to the sector over the course of the pandemic (2020-2022), including the Employment Wage Subsidy Scheme (EWSS).

A temporary Transition Fund was put in place to bridge the gap between the end of the EWSS and the introduction of Core Funding. The Transition Fund, which operated from May-August 2022, made a contribution of 7% of each service's calculated income capacity in respect of the weeks that the service was open. This was a significant contribution to services' sustainability.

Interim Funding was in place to bridge the gap between the end of the Transition Fund (August 31) and the introduction of Core Funding (September 15). This enabled a smooth transition from one scheme to the other once the Employment Regulation Orders were in effect.

I have been unequivocal that I do not want any services to be faced with financial sustainability issues and remain fully committed to working with providers to support them. Sustainability supports, including funding if required, are available for any providers that may face financial difficulties at this time. To date, in 2022, just two services have applied for sustainability funding. Services can also avail of the Temporary Business Energy Support Scheme.

Together for Better provides a robust model of funding to the sector and aims to transform the sector. The necessary safeguards are in place to support any providers who may need additional assistance. I have not yet seen evidence of the need to make amendments to the model of funding currently available through Core Funding in Year 1 of the Scheme.

The full year value of Core Funding will increase by €28m to €287 million in Year 2, an increase of 11% in the allocation. Approximately, €4m of the additional funding for Year 2 will achieve the removal of the 3-year experience rule for graduate premiums, with an additional €24m earmarked for other developments to the Scheme, informed by the emerging data from Year 1 of operation. Further interrogation of the new Core Funding application data is required in order to most effectively design developments in Year 2 of the scheme. Developments may focus on promoting further capacity expansion, investing more in the base rate or to taking more targeted initiatives to invest in specific parts of the sector.

I am committed to working with Partner Services delivering early learning and childcare for the public good.