Ireland: New childcare funding scheme will freeze this year's fees at 2021 rates.

Minister for Children, Roderic O’Gorman has unveiled a new funding model aimed at bringing “transformative change” to the childcare sector.

O’Gorman said that Together for Better will provide a “sound framework” to improve the quality and affordability of childcare, and pay and conditions for workers.

It will incorporate the Government’s €221 million core funding scheme, as well as the Early Childhood Care and Education (ECCE) programme and the National Childcare Scheme (NCS).

O’Gorman said the model will bring about “transformative change to this vital sector”.

“Together for Better supports improved affordability for parents; better pay and conditions for staff; improved availability for families through increased capacity; and greater financial stability for service providers,” he said.

It is the "initial step towards considerable future developments in the industry which will be introduced in the coming years," the Green Party TD continued.

By 2028, the government intends to contribute at least €1 billion to the new finance model.

Together for Better was introduced by O'Gorman today as the basic funding programme went into effect.

He said that around 4,000 childcare providers have endorsed the basic funding model.

The initiative has the support of nine out of ten early learning and care (ELC) and school-age childcare (SAC) providers.

He stated, "I am thrilled that 90% of services have decided to join forces with the State by joining up.

It implies that childcare costs at those facilities will remain fixed at 2021 levels.

The new model would address the reality that the majority of early childhood educators have been earning less than the living wage and the sector experiences a staff turnover rate of 19% annually, according to Senator Pauline O'Reilly, the Green Party's spokesperson for education.

"Today, this changes. With fee reductions anticipated in the budget, parents will be safeguarded from additional increases in childcare expenses, while more than two out of every three childcare workers will receive salary increases this month.

"This gives parents a great deal of certainty," O'Gorman continued, "and ensures that parents can fully benefit from future investments in the National Childcare Scheme, including the extension of the universal subsidy to children of all ages which came into effect in August, without running the risk of increased State subsidies being absorbed by increased parental fees."

The Employment Regulation Orders (EROs) for the sector began on Thursday, coinciding with the implementation of the core funding model, which was initially introduced in the Budget from the previous fiscal year.

Over 70% of industry workers will see an increase in compensation as a result of the EROs, which will also create a staff pay structure and specifically recognise various jobs and qualifications.

According to O'Gorman, "This historic achievement has been made possible by the commitment in core financing."

According to the minister, there is "strong indication" that capacity is growing in the industry.

According to him, "record numbers of services have requested a change in circumstance on the Tusla register, mostly to expand the operating hours or number of child spots being given."

"Up to mid-August, there has been a 261% rise in change-of-circumstance applications for School-Age Childcare services compared to 2021 and a 31% increase in change-of-circumstance applications from Early Learning and Care services."

In terms of pricing, quality, and accessibility, "already all the signs point to it delivering major and welcome change in the sector," O'Gorman continued.