Dáil Éireann Debate, Thursday - 7 November 2024
398. Deputy Brendan Smith asked the Minister for Children, Equality, Disability, Integration and Youth if he will ensure that the core funding model for each county will be amended to take into account recent additional costs on such services impacting on their viability with potential closures and subsequent loss of childcare places; and if he will make a statement on the matter. [45974/24]
View answerThe introduction of Core Funding in 2022 brought a significant increase in investment for the sector, with €259 million of funding paid directly to services in year 1 of the scheme, of which €210.8 million was entirely new funding.
One of the key objectives of Core Funding is to support the sector as a whole with the introduction of direct supply-side funding, in addition to the ECCE programme and the NCS, to create a more stable and sustainable financial environment.
Core Funding is a grant to Early Learning and Care (ELC) and/or School Age Childcare (SAC) providers towards their operating costs. 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.
It is designed to deliver:
Affordability for parents through Fee Management 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.
This funding, which increased by 11% (to €287 million) in year 2, increased again by another 15% in year 3 (to €331 million).
This funding facilitated the following changes from September:
The Base Rates for all age groups increased with larger increases in funding for places offered to children under the age of three. In short, all providers currently signed up to Core Funding will receive a higher payment going forward to support their day-to-day costs.
The flat rate for services registered on the Tusla Early Years Register as sessional-only (a pre-school service offering a programme for a total of not more than 3.5 hours per session) is increasing from €4,075 to €5,000. This will strengthen supports to sessional-only services, who typically operate for shorter hours per week and fewer weeks per year.
The minimum Base Rate allocation increased from €8,150 to €14,000. This is the minimum amount of funding a centre-based service (not childminders) will receive through their Base Rate and ensures a minimum guaranteed income for services.
Additionally, there has been changes in the Fee Management conditions of the scheme.
Up to now, services availing of Core Funding have not been allowed to raise their fees above what was charged to parents on 30 September 2021 (or at the point of first signing up for Core Funding if the service did not exist on 30 September 2021).
The fee freeze will remain in place for the majority of these services for year 3 of Core Funding, though services whose fees have been frozen at a level that may not be sufficient to sustain their business even with increased funding available through Core Funding, will have the opportunity to apply for a Fee Increase Assessment.
Only services currently charging low fees (fees below the average in their county) will be eligible to apply and the onus will be on the provider to demonstrate a need for a fee increase.
In addition to the increased level of Core Funding for year 3 of the scheme and fee management developments, there are wider financial supports available from the Department where a service is experiencing financial difficulty or has concerns about their viability, which can be accessed while remaining within Core Funding.
Currently, 91% of services have signed up to year 3 of Core Funding. The application rate for year 3 of Core Funding is similar to the application rate for the same period in 2023, with services continuing to sign up. Providers can sign up to the scheme at any time over the course of the programme year.
Every year it is normal for some ELC and SAC services to close while other new services open. As of September 2024, 302 new ELC and standalone SAC services have opened with 112 ELC and standalone SAC services closing. Meaning there is a net increase of 190 services to date in 2024.
In 2023, there was a total of 296 new ELC and standalone SAC services, with 167 services closing. Meaning there was a net increase of 113 services in 2023.
Core Funding is set to rise to a minimum of €350.64 million in programme year 4 (September 2025 – August 2026), before additional funding to support the outcomes of further Employment Regulation Order (EROs) agreed by an independent Joint Labour Committee (JLC) is considered.
This additional funding to support the outcomes of the JLC process is worth €45 million in year 4.
