Review into funding model for small childcare providers could result in fresh bailout

Small childcare providers could be in line for a fresh bailout from the Government if research bears out their contention that a new funding model for the sector has left them struggling financially.

Last month, up to 500 providers of smaller, so-called “sessional” childcare which relies mostly on Government funding streams rather than fees paid by parents closed for a day in protest at Minister for Children Roderic O’Gorman’s new funding model.

They claim that the €259 million policy of “core funding”, introduced in last year’s budget, has seen smaller providers lose access to funding. The policy seeks to cap fees to parents while providing new funding to providers.

Mr O’Gorman said at the time that the protests were “unwarranted” and “disappointing”, and that the new scheme would see funding to the services increase by €13 million. The services, which largely operate only in hours funded by the governments Early Childcare Care and Education (ECCE) programme.

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However, in a communique sent to providers last week, the Department said that in recognition of the points raised by the protesters and the concerns expressed, an independent review of the finances of these services will be commissioned and completed in the first quarter of next year.

While the providers were told that the evidence available is that the funding available is sufficient to meet the needs of all childcare services, the independent review “could form a basis on which any targeted measures, if required, can be taken”. He said

However, they were warned: “The minister is clear that, in order for any allocation of taxpayer funding to take place, evidence must be gathered to support it.”

The providers, who have contended that the new funding model were told that the most recent information available to the Department “does not suggest any widespread closures of services as a result of Core Funding” and that data from Tusla shows the number of closures and new openings are “broadly in line with other years” and reasons cited for closure suggest services citing varied reasons for pulling down their shutters.

“However, the Minister has been unequivocal that he does not want any services to be faced with financial sustainability issues and is fully committed to working with all services to support them in delivering early learning and childcare for the public good.”

The Department wrote that the “independent, rigorous process to establish the extent of any funding issues offers the best way forward”.