Ivana Bacik (Dublin Bay South, Labour)
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1742.To ask the Minister for Children, Equality, Disability, Integration and Youth the cost of implementing new pay scales in the early years sector, following implementation of the new core funding model in each of the years since its implementation; if fewer monies were required to fund pay increases, the way in which those funds were instead used; and, if more monies were required to fund pay increases, the provenance of those additional funds. [31029/24]

Roderic O'Gorman (Dublin West, Green Party)
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In September 2022, I launched Together for Better, the new funding model for early learning and childcare. Together for Better brings together Core Funding, the Early Childhood and Education (ECCE) programme, the Access and Inclusion Model (AIM), the National Childcare Scheme (NCS), and the newly announced Equal Start.

Core Funding is a grant to early learning and childcare providers towards their operating costs. It aims to improve:

• Affordability for parents through ensuring no unapproved increases in fees and offering NCS and ECCE to all eligible children;
• Quality in services, including through better terms and conditions for staff and supporting graduate leadership in services; and
• Sustainability for providers through substantially increased funding to the sector, paid on a consistent and equitable basis.

• €331 million is allocated for Year 3, an increase of €44 million (15%) on Core Funding Year 2.
• €249 million will be available for the Base Rate
• €55.8 million will be available for the Graduate Premiums
• €9 million will be available for targeted measures

I firmly believe the level of pay for early years educators and school-age childcare practitioners should reflect the value of their work for children, families, society and the economy.

The State is not the employer and therefore does not set the pay or conditions for employees in either early learning and care (ELC) or school-age childcare (SAC) services.

However, there is now, through the Joint Labour Committee (JLC) process, a formal mechanism established by which employer and employee representatives can negotiate minimum pay rates for ELC and SAC services, which are set down in Employment Regulation Orders (EROs). This is an independent process from the Department and neither I, nor my officials, have any role in the proceedings of the JLC and any associated negotiated minimum pay rates, the cost of which is borne by the employer.

Among other objectives, Core Funding supports the ability of service providers to meet the additional costs resulting from the EROs for Early Years Services, which came into effect in September 2022, as it provides increases in funding to early learning and childcare service providers to support improvements in staff wages, alongside a commitment to freeze parental fees.

Recently, Emer Higgins T.D., Minister of State for Business, Employment and Retail accepted proposals for new Employment Regulation Orders for the Early Years Services Sector. The Orders commenced on 24 June 2024 and increased the minimum hourly rates of pay for all grades. In addition, the ERO removed the requirement for graduates to have 3 years’ experience before they are eligible for graduate minimum pay rates.

On the basis of 2024 data supplied by Partner Services taking part in the Core Funding scheme, the estimated cost of the new ERO rates is €21m. In relation to the estimates above, the following should be noted:

• The cost estimate is based on staff who had an hourly wage recorded in service providers’ submissions for Core Funding, but the Core Funding data has been extrapolated to provide an estimate for all staff working in the sector.
• Cost estimates are based on the most recent data available to the Department which was provided by service providers in May 2024, this data was provided prior to the new EROs for Early Years Services came into force on 24 June 2024.
• Calculations are based on minimum rates of pay set out in the initial ERO which came in to effect in September 2022.
• Calculations are based on wage-data available at a point in time. Some services may have increased wages more recently, which would reduce the cost to services of moving from current wage-rates to the propose wage rates in the question.
• The cost estimates only relate to staff and managers covered by the current EROs, i.e. the estimates exclude the cost of ancillary staff.
• The cost estimates do not attempt to account for the potential cost implications for the wages of staff who are currently earning more than the increased rates above current ERO minimum rates.
• It should be noted that the figure is the additional cost to employers, rather than the additional cost to the State. Core Funding offers a contribution to staff costs. The €287m allocated for Core Funding in year 2 may already support some employers to pay wage rates above ERO minimum rates.
• The figure does not take into account the income currently received by those working in the sector who are self-employed and who derive their income from profits rather than wages.