Dáil Éireann Debate, Tuesday - 13 June 2023
1076. Deputy Brendan Griffin asked 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]
View answerOn 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.
