Ruairí Ó Murchú (Louth, Sinn Fein)
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160. To ask the Minister for Children, Equality, Disability, Integration and Youth his plans, if any, to deliver a sustainable, affordable early learning and pre-school sector; and if he will make a statement on the matter. [49960/22]

Roderic O'Gorman (Dublin West, Green Party)
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On 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.

Together for Better is about getting the most out of the three early learning and childcare programmes, and ensuring stability and sustainability in the sector. I do not want any services to be faced with financial sustainability issues and I am fully committed to working with any such service to support them in delivering early learning and childcare for the public good.

We are not seeing any evidence of a significant lack of sustainability for ECCE-only services or to suggest that services will face closure as a result of Core Funding. Services that are experiencing difficulty and who would like support are encouraged to contact their City/County Childcare Committee (CCC) to access case management supports. Services can be assisted on an individual basis through this route and it also allows for trends and themes across the country to be identified that can inform a more systematic response if necessary. We are not receiving any indications from CCCs that there have been providers reporting financial difficulties and in need of support. This case management process through the CCCs is the route to access additional sustainability funding if required.

Data from Tusla on numbers of closures in recent months show that the number of closures this year is broadly in line with other years, and reasons for closure (given to Tusla by service providers that have closed) suggests considerable diversity in the reasons for closure. While some services have closed for financial or regulatory reasons, many have closed for other reasons (e.g. retirement of the owner/manager).

The Department, Pobal and the CCCs continue to closely monitor trends concerning services entering case management and will continue to maintain the availability of Sustainability Funding for individual services at risk.

The primary purpose of Core Funding is to improve pay and conditions in the sector as a whole and improve affordability and accessibility for parents as well as ensuring a stable income to providers. Core Funding allows for a very substantial increase in the total cost base for the sector without requiring those costs to be passed on to parents. The vast majority of services are seeing substantial increases in funding. No service will see a decrease in funding. Core Funding will contribute to services’ sustainability and will significantly increase income for the overwhelming majority of services and provide greater funding stability.

With Core Funding in operation for four weeks, key achievements already include:

- Fee management in place for over 90% services on at least September 2021 levels, to ensure that developments in National Childcare Scheme (NCS) are fully realised by parents.

- Agreement of Employment Regulation Orders covering staff at all grades in the sector and instituting differential pay rates for graduate staff in certain roles, putting in place a career framework for staff in the sector to support recruitment and retention.

- Improved pay for an estimated 73% of those working in the sector who will see their wages rise as a result of the Employment Regulation Orders, which would not have been achieved without Core Funding.

- A significant expansion of capacity, resulting in more hours of provision for parents and children and opportunities for staff to work more hours per week and weeks per year.

I was delighted to announce under Budget 2023 that the original allocation for Core Funding will be increased to €259 million for Year 1 of the Scheme to meet the cost of expanded capacity that has materialised through the actual application data that has been received to date. In addition, the full year value of Core Funding will increase by €28 million to €287 million in Year 2 of the Scheme, an increase of 11% in the allocation.

The additional allocation to Core Funding in Year 1 of the Scheme will cover the additional costs arising from substantially increased capacity, and particularly capacity for younger children which we have seen grow significantly, as well as covering the increased costs arising from greater numbers of graduates in leadership roles.

In Year 2 of the Scheme, I intend to remove the requirement of 3 years’ experience for graduate premiums and plan to support this change with approximately €4 million, on condition of an ERO reflecting this change for both Graduate Lead Educator and Graduate Managers roles. Many representatives in the sector advocated for this development. The additional allocation for Year 2 will also allow for some further developments to Core Funding which may include additional investment through the base rate or more targeted approaches. Any such developments will be driven by analysis of data available through the Core Funding application process.

As part of Budget 2023, I also announced major reforms to the NCS from January 2023, which will substantially improve the affordability of early learning and childcare for families.

Additional funding of €121 million has been allocated to the NCS from January 2023 so all families accessing registered early learning and childcare will receive a minimum hourly NCS subsidy of €1.40 off the cost of early learning and childcare. With the current minimum hourly NCS subsidy set at €0.50 per hour, the represents an additional €0.90 per hour off the cost of early learning and childcare. This translates to up to €63.00 off a family's weekly bill for early learning and childcare per child. With up to €22.50 currently available per week, this represents up to an additional €40.50 off weekly costs.

From 2nd of January 2023, any family who is not already at the maximum hourly subsidy under NCS will see an increase in their subsidy. For those who receive a subsidy based on an income assessed subsidy, the amount of the increase will taper down as they approach the maximum hourly subsidy rate. The amount of increase individual families will see in their per hour subsidy, will differ depending on their current subsidy.

A central condition for all Partner Services is that they must not increase fees above those which were charged last year. This gives parents greater certainty about what they will be charged and ensures that the significant increases to NCS subsidies announced in Budget 2023 are not absorbed by fee increases. The approach to fee management will be developed further over time. Fee management is a key part of the new funding model and features in four of the 25 recommendations laid out in the Expert Group report, developed further to two years of analysis, research and consultation.

Budget 2023 allocates €1,025m to early learning and childcare – a clear demonstration from Government of the value of the sector. Together for Better aims to transform the sector and I am committed to working with Partner Services delivering early learning and childcare for the public good.