Steven Matthews (Wicklow, Green Party)
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12. To ask the Minister for Children, Equality, Disability, Integration and Youth the number of childcare services that have signed a core funding contract for the coming programme year; the number of partner services that have withdrawn in each programme year to date; and if he will make a statement on the matter. [38547/24]

Marc Ó Cathasaigh (Waterford, Green Party)
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I am taking this question on behalf of Deputy Steven Matthews.

Under this Government we have seen significant funding put into childcare, particularly through the core funding model. What is the number of childcare services that have signed a core funding contract for the coming programme year, the number of partner services that have withdrawn in each programme year to date, and could the Minister make a statement on the matter?

Roderic O'Gorman (Dublin West, Green Party)
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The introduction of core funding in 2022 brought a significant increase in investment for the sector. A sum of €259 million in funding was paid directly into services in year one of the scheme, of which €210.8 million was entirely new funding. This funding, which increased by 11% to €287 million in year two, increased again by 15% in year three to €331 million.

In the first programme year, a total of 11 services withdrew from the scheme but remained open. In the second programme year, a total of 16 services withdrew from the scheme and remained open. For this current programme year, which commenced on 2 September, five services had withdrawn from the scheme as of 1 October.

Currently, 90% of services have signed up to year three of core funding. The application rate for year three of core funding is similar to the application rate for the same period in 2023, with services continuing to sign up. While it is my ambition to have as high a take-up as possible to core funding, a small proportion of early learning and childcare services - approximately 5% - chose not to join core funding in years one and two of the scheme, of which 98% were for profit services.

In view of the 15% increase in core funding in year three and the associated supports, including the increase in the flat rate allocation for sessional services to €5,000, an increase in the minimum core funding allocation to €14,000 and the introduction of the fee increase assessment process, I am confident that participation rates will continue to remain on par with previous years.

In the budget announced yesterday, I was able to set out the core funding allocation for year four and that will be €390 million. A proportion of that will be allocated for a pay agreement that we hope to see made between the unions and providers in 2025. The State will step up to support that with direct investment to help providers to meet the pay needs of their staff.

Marc Ó Cathasaigh (Waterford, Green Party)
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I thank the Minister. That movement towards fair pay for the work being performed in these childcare settings is really important. We know one of the real issues is the retention of staff and a lot of that relates to pay grades and people moving on to some place where they can essentially afford their mortgage or whatever it is in their next stage.

Where do the gaps still persist? The core funding model has been successful and 90% of services have opted into it. Is there an analysis of the characteristics of those who chose to stay outside it? For example, does it reach the very small, rural childcare provider? Is that one of the issues that needs to address? Does it reach the larger services? Will the Minister outline the gaps in provision that persist and where the model needs to be tweaked to reach those services?

Roderic O'Gorman (Dublin West, Green Party)
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The core funding model has been tweaked quite significantly between years one and three. In year one, funding was allocated according to the number of hours and the number of children that a service had but we recognised after year one that smaller services were disadvantaged by that. In year two, we brought in two changes. We brought in a minimum floor of core funding below which no service would go, including even very small services. We also brought in a sessional-only rate for services that do ECCE only so they would get an additional payment. In year three, we significantly increased these so the floor rate is €14,000 and no service gets less than that under core funding. The minimum payment for sessional services is now €5,000. The big change in year three of the model was the application for a fee increase. Prior to that we had frozen everyone's fees at 2021 levels but recognising some services last raised their fees a number of years earlier, we wanted to make the opportunity for them to apply to raise their fees.

Marc Ó Cathasaigh (Waterford, Green Party)
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I thank the Minister for his recent visit to the Waterford Childcare Centre, which is a really outstanding example in my constituency of that kind of community-owned and operated childcare model. There have been indications from the Minister and from other senior figures within the Government that we should look towards public provision as well. That begs the next question of how we see those pieces of the jigsaw come together where we will get community childcare facilities, for-profit facilities, which will remain part of the picture, and how public provision of childcare provision begins to stitch into that. Are we moving more in that direction? What we have done under the core funding model is a significant step in terms of the State being involved seriously in the provision of childcare for the first time. Where do we go from here? What is the roadmap? Where do we see public provision fit in as part of this overall jigsaw?

Roderic O'Gorman (Dublin West, Green Party)
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I really enjoyed my trip to the Waterford Childcare Centre and the beautiful poster I received from the children and staff there with the handprints on it has pride of place in my office.

We will have the opportunity in the general election to really tease out issue of the degree of State involvement in the provision of childcare because I recognise parental choice is really important here. Some parents, other than the two years ECCE scheme, do not want or have any further need of early learning and care. Other parents need a lot more. How that is provided, whether it is through a fantastic private provider, a fantastic community provider or potentially a fantastic State provider, should be a choice we give to parents. What concerns me right now is that there are parts of the country where parents do not have a choice because the capacity is not there. The private and the community providers are not able to provide that and that is where the State needs to step up now in the direct delivery of childcare. It will not be replacing community or private providers; it will be alongside them, supplementing them and ensuring every child has the opportunity to enjoy high quality and affordable early learning and care.