In September 2022, I launched Together for Better, the new funding model for early learning and childcare (ELC).
This new funding model supports the delivery of ELC for the public good, to provide affordability, accessibility and quality for children and families as well as sustainability for providers.
Through Together for Better, my Department provides a number of schemes which offset the cost of ELC to families, these are 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.
The ECCE programme, which provides two years of preschool without charge, enjoys participation rates of 96% each year. Over 70% of families on low income report that they would not be able to send their child to preschool without this programme.
The National Childcare Scheme (NCS) complements the ECCE programme, providing subsidies – both universal and targeted - to reduce the costs to parents for children to participate in ELC.
Since January 2023 - with the increase in the minimum NCS subsidy to €1.40 per hour – out of pocket costs to families have fallen by 25% on average. From this September, the minimum subsidy will increase again to €2.14 per hour – and the cumulative reduction in out of pocket cost is estimated to reach 50% on average where services’ fees remain at current levels.
As of 5 June 2024, the total number of children who have benefited from the NCS subsidy since 27 June 2020 is 223,395.
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Calendar Year
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Total Unique Children
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2020 (From 27 June)
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43,940
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2021
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76,412
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2022
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123,463
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2023
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182,043
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2024 (Up to 5 June)
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166,220
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All Years (Unique Children)
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223,395
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The total number of unique children across all years is lower than the sum of the totals for each year because children that availed of NCS in more than one year are counted only once in the grand total.
The success of the National Childcare Scheme (NCS) in meeting family’s needs is evidenced through the increased level of participation in the Scheme; record numbers of children and their families are now benefiting from the NCS.
To increase awareness of the National Childcare Scheme, my Department has promoted the Scheme through www.gov.ie/childcare ; online and in person promotion campaigns; and through the national network of City and County Childcare Committees.
Finally, Core Funding has ensured 95% of ELC services maintained a fee freeze for the past 2 years. As a result, the NCS delivered real change for parents rather than being absorbed by service applied fee increases. Core Funding in year 3 will introduce a controlled fee increase approval process. Partner Services with fees below a certain threshold can apply to increase their fees up to an approved level. To balance the needs of Parents/Guardians and Partner Services, there will be an assessment to ensure there is a demonstrable need for a fee increase before approval is granted. Where approval occurs, NCS subsidies will ensure that no increase in out-of-pocket costs will be felt by parents/guardians.
Core Funding is a grant to ELC 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
• €17.5 million will be available for growth in the sector
This effective fee freeze will continue in Year 3 for most Partner Services. However, there will be some changes to fee management in Year 3, including:
• A new common fee structure
• A fee increase process for certain services
• A fee cap
In Year 3, Partner Services with fees below a certain level can apply to increase their fees up to an approved level. To balance the needs of Parents/Guardians and Partner Services, there will be an assessment to ensure there is a demonstrable need for a fee increase before approval is granted.
Where a demonstrable need to increase a fee is confirmed, the resulting increase will not exceed €0.74 per hour (the increase to the National Childcare Scheme subsidy from September 2024). For example, an offering of 45 hours will not be eligible for an increase of more than €33.30.
A cap on fees will be introduced in Programme Year 2024/25 for all Partner Services joining Core Funding for the first time in Programme Year 2024/25. The fee caps will be built upon the common fee structure, introducing a maximum allowable fee across the six Fee Bands (A-F). The maximum allowable fees scale proportionately across the six bands:
Fee Band Hours per week offered under fee option Maximum allowable fee for First-Time Partner Services
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A Less than 10 hours €65
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B 10 hours to 19 hours 59 minutes €130
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C 20 hours to 29 hours 59 minutes €195
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D 30 hours to 39 hours 59 minutes €260
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E 40 hours to 49 hours 59 minutes €325
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F More than 50 hours €390
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The design of funding schemes and the increased allocation of resources to the sector is supporting ongoing expansion of capacity, and in particular for young children. The rates of both the National Childcare Scheme and Core Funding are weighted towards funding for young children given the higher staff costs that are required to operate at lower ratios.
Additionally, capital funding has been allocated to the ELC sector under the revised National Development Plan (NDP). This will enable significant investment in further expansion of capacity. The Building Blocks Grant schemes are focused on increasing the number of full and part-time places available for 1-3 year olds.
Last week, I was pleased to announce details of the Building Blocks Extension Grant scheme. The Building Blocks Extension Grant scheme will provide funding to support services to deliver thousands more affordable ELC places. This is the most significant capital investment in the sector since the establishment of my Department in 2011.
Additionally, I have established a new unit in my Department to undertake more detailed analysis of the nature and quantum of supply and demand for ELC across the country. This work will help to inform how best to support the delivery of provision in the years to come.
