Q&A: Employment regulation order and ‘core funding’ explained

Why is the new employment regulation order (ERO) for childcare workers being described as “historic”?

It is the first time this workforce of up to 30,000 people — mostly women — will be entitled to minimum pay rates. This is seen as an important first step in recognising the crucial work they do, in tackling the staff retention crisis in the sector and is the culmination of years of campaigning by trade unions.

Entry-rate pay will increase from €11.57 to €13 an hour, with rates for “room leaders” and managers — and the package comes into effect from next Thursday, September 15th.

That is still quite low pay. Will these rates increase?

Yes. Minister for Children Roderic O’Gorman indicated that he wanted early years workers in the sector to achieve parity with national schoolteachers, whose entry rate is €38,192 annually, or about €18 an hour. Siptu, which represents 6,000 workers in the childcare sector, said on Wednesday the ERO was “our first pay deal, not our last”.

How will childcare providers be able to afford these increases?

The answer brings us to the other “historic” aspect of the ERO. It triggers the start of “core funding” — the Government’s big plan towards publicly funded childcare.

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Some €221 million will be invested this year, increasing year on year to 2028 when the purse will be almost €1 billion a year. The bulk of this is to improve wages and conditions.

That’s great for workers and providers. But what about parents? Will the crippling costs come down?

That’s the promise. First, all providers who sign up for core funding must freeze their fees this year at last year’s rates. Secondly, the subsidies parents get towards childcare costs through the National Childcare Scheme (NCS) will increase, according to Mr O’Gorman.

He has all but staked his reputation on a commitment to bring down childcare costs by 50 per cent over the next two budgets.

A “substantial” chunk of this will happen in Budget 2023, he says — details of which we will get on September 27th. Speaking to The Irish Times, he said: “I am working as part of the budgetary negotiations to secure an increase in the NCS, in the subsidy parents get. That is my number one focus in this year’s budget.”