Roderic O'Gorman (Dublin West, Green Party)
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Core Funding, which began in September 2022, is the new funding stream to start a 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.

In 2022, €68.7m was initially secured for Core Funding. Following the revised estimates process in October 2022, €84m was ultimately made available for Core Funding (including Interim Funding) in 2022. There was no underspend in 2022 with an outturn figure of €84.037m.

In 2023, €265.886m was secured for Core Funding. There was a Supplementary Estimate in 2023 at which time the Core Funding REV allocation was revised. Therefore, €257.767m was ultimately made available for Core Funding in 2023. The 2023 outturn figure will be published when the Appropriation Accounts for the Vote are published at end September 2024.

The lower than expected outturn for the Core Funding Grant scheme was a result of a delay in removal of the 3 years’ experience rule linked to the graduate premiums for Core Funding, a change which must be reflected in EROs before the funding is released, a lower than expected uptake in the initial months of Year 2 and a revised payments calendar resulting in expenditure alternatively profiled and captured in 2024.

€160m of the €259m allocation for the 2022/2023 programme year went towards supporting improved pay rates across different categories of staff.

There was also an additional €47m available for graduate premiums, bringing the total funding amount allocated of core funding provided in Budget 2022, specifically towards staff pay, to €207 million for the first year of the scheme.

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.

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. 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.

Please see table below outlining the number of providers that accessed Core Funding in 2022 and 2023.

Please note, 2 programme years* occurred in 2023 and the table outlines the number of unique services who received Core Funding during the relevant period, with the two programme years presented separately.

*The first programme year of Core Funding was in operation between 15th September 2022 to 31st August 2023. Year 2 of the scheme began on 1st September 2023.

Rose Conway-Walsh (Mayo, Sinn Fein)
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578. To ask the Minister for Children, Equality, Disability, Integration and Youth to confirm that in September 2024 his Department plans to introduce a further 25% reduction in average childcare fees, and that this will result in a 43.75% reduction of fees on 2022 levels, on average; and if he will make a statement on the matter. [16109/24]

Roderic O'Gorman (Dublin West, Green Party)
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As announced as part of Budget 2024, from September 2024 the universal subsidy provided through the National Childcare Scheme (NCS) will be increased from €1.40 to €2.14 per child per hour. This change follows on from a previous increase to the NCS universal subsidy from €0.50 to €1.40. The upcoming increase to €2.14 will reduce out of pocket childcare costs by 50% overall when compared to 2022 levels. It should be noted that this reduction is a result of cumulative changes and is based on calculations made during Budget time.

The fee freeze in place in 94% of services participating in the Core Funding Scheme which has been in operation since 2022 ensures that these enhancements to the NCS subsidies will not absorbed by fee increases.