Jennifer Whitmore (Wicklow, Social Democrats)
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1075. To ask the Minister for Children, Equality, Disability, Integration and Youth if a child's absence by virtue of illness will impact on their qualification for receipt of the NCS grant; and if he will make a statement on the matter. [27986/23]

Roderic O'Gorman (Dublin West, Green Party)
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The National Childcare Scheme is designed to be flexible and acknowledge that childcare needs differ widely across different families. NCS subsidies are awarded as an hourly rate, along with a maximum number of weekly hours that the subsidy will be paid for. The actual subsidy payment is based on the hours agreed between the parent and provider, and claimed by the provider on the NCS system. Given the large amount of public money that is invested by the Exchequer in funding the Scheme, this ensures an appropriate level of oversight and accountability.

A certain level of under-attendance is permitted under the NCS. The Scheme recognises that there are many reasons why a child's attendance may occasionally be less than their agreed hours due to, for example, illness or appointments - or a parent being able to collect their child earlier than usual. The subsidy is not affected if parents collect their children earlier on occasion, or if a child misses a week or two due to illness. The attendance rules relate to circumstances where a child is continuously absent from a service, or not fully using the agreed place over a prolonged period. These rules are intended to reflect the realities of family life in a child-centred, fair and proportionate manner.

Where a child is not fully using the agreed place, the NCS allows for an eight-week cycle of continued under-attendance. As long as the under-attendance is broken by one full week of attendance for the agreed hours, the subsidy will remain unchanged. The Scheme also provides for particular exemptions to the attendance rules under certain circumstances to allow for extended absences up to 12 weeks in exceptional circumstances, including a prolonged illness.

Brendan Griffin (Kerry, Fine Gael)
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1076. To ask the Minister for Children, Equality, Disability, Integration and Youth if childcare services making financial losses under core funding will be allowed to increase their fees to protect the future viability of their services; and if he will make a statement on the matter. [28016/23]

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.

Core Funding, which began in September 2022, is the new funding stream worth €259 million in full year costs 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 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. It follows that service opening longer hours and operating more weeks in the year will receive more Core Funding.

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. Core Funding introduces fee management, which in year one is effectively a fee freeze, where providers cannot increase the fees charged from last September 2021. This ensures that parents’ costs do not increase and that the increased NCS subsidies are fully felt by parents. 95% of services have now signed up to Core Funding, ensuring that fee management impacts very widely. Core Funding also requires Partner Services to offer the NCS and/or ECCE to all eligible parents to ensure that parents can avail of their full entitlement to subsidised provision.

For the second year of operation, Core Funding will increase by €28 million, an 11% increase, to a total of €287m. My Department use the most recent data available to allocate this funding, with data emerging from current operations of services from March 2023 underpinning the recently announced allocation model for year 2, as well as the most up-to-date macroeconomic projections.

There is no substantive change to the approach to Fee Management in Core Funding year 2. This is guided by the recommendations of the Expert Group, as approved by Government, to ensure that the introduction of Fee Management to the sector is done in a sustainable and considered manner.

As outlined in Partnership for the Public Good, the new system of Fee Management should focus first on limiting increases in fee rates. The Fee Management system can only evolve based on an analysis of provider income and cost data, which will be gathered through financial returns in October 2023 to underpin developments in Fee Management for year 3.

The fee freeze was deemed by the Expert Group as the most appropriate way to introduce fee management accepting that each individual service determined their own fee policy in September 2021.

I do not want any services to be faced with financial sustainability issues and am fully committed to working with any such service to support them in delivering early learning and childcare for the public good. There are supports, financial and otherwise, available to services who need them. Services that wish to deliver early learning and childcare for the public good will be supported to do so. Extensive additional information on Core Funding and the new funding model is available at: first5fundingmodel.gov.ie/.

Further individualised support is available directly through the City/County Childcare Committees (CCC) who act on behalf of my Department. This can include tailored information on my Department’s funding programmes, support with accessing online systems, and individualised case management supports to services that require it. For specific queries or concerns in relation to Core Funding or any other of my Department’s programmes, Partner Services are encouraged to contact their local CCC who will be best placed to provide individual and confidential guidance and support. Contact details are available at: myccc.ie/where-is-my-nearest-ccc.

Brendan Griffin (Kerry, Fine Gael)
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1077. To ask the Minister for Children, Equality, Disability, Integration and Youth if childcare services core funding will be increased in line with the current rate of inflation; and if he will make a statement on the matter. [28018/23]

Roderic O'Gorman (Dublin West, Green Party)
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Over the past eight budgets, investment in Early Learning and Care (ELC) and School-Age Childcare (SAC) has risen from €260 million in 2015 to € 1.025 billion in 2023, reaching the First 5 investment target 5 years ahead of schedule. This investment is a clear demonstration from Government of the value of the sector.

Core Funding, which began in September 2022, is the new funding stream to start the 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 improve affordability for parents as well as ensuring a stable income to providers.

The original Core Funding allocation of €207m increased to €221m in Spring 2022 at a time when cost pressures were significantly increasing. This further increased to €259m based on significant capacity growth in sector in Budget 2023 with additional contributions for staff pay and conditions, non-staff overheads, administration staff/time and graduates factored in.

For the second year of operation, Core Funding will increase by €28 million, an 11% increase, to a total of €287m.

Approximately €4m of this new funding will be used to remove the experience requirement on both Graduate Premiums under Core Funding, underpinned by new EROs. This move was widely welcomed in the sector.

The remaining €24m will be used for further developments and enhancements to the scheme. €6.11m in funding has been allocated for non-staff overheads, a significant increase on the current allocation of €23m. This will facilitate the continuation of the fee freeze into the second year of the scheme, ensuring that any potential increases in non-staff costs are not passed on to parents whilst supporting services sustainability.

The majority of Core Funding is distributed to services via the base rate, 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.

The base rates in Core Funding have been developed using the various components associated with the cost of delivery of service provision such as; staff pay and conditions, including contact and non-contact time, holiday pay, sick pay and other employer costs; administrative staff/time and non-staff overhead costs.

The Department use the most recent data available to allocate this funding, with data emerging from current operations of services from March 2023 underpinning the recently announced allocation model for year 2, as well as the most up-to-date macroeconomic projections. This allows for the base rates under Core Funding to be set looking forward into the programme year to come, as these rates will not change during the programme year.

Although, the cost of delivery components have been used to derive the base rates the eligible areas of expenditure of the Core Funding grant are much broader. Partner Services can choose how to spend their Core Funding grant in accordance with the approved areas of expenditure outlines in the Funding Agreement.

I am committed to increasing State funding for ELC and SAC as part of a multi-annual budget process and continuing to work with Partner Services delivering early learning and childcare for the public good.