Core Funding, which was introduced in 2022, operates alongside all other early learning and childcare programmes and constitutes additional income to services on top of these programmes, and parental fees.
The scheme is designed to meet the combined objectives of:
• Improved affordability for parents through the introduction of fee management and
• contractual requirements on providers to offer the National Childcare Scheme and/or the ECCE programme
• Improved quality through better pay and conditions for the workforce by supporting agreement on an Employment Regulation Order through the Joint Labour Committee;
• Supporting the employment of graduate staff; and
• Improved sustainability and stability for services.
Since Core Funding was introduced, the effectiveness of the scheme in meeting these objectives has been subject to ongoing review, and the scheme itself has evolved year on year.
The introduction of Core Funding in 2022 brought a significant increase in investment for the sector, with €259 million of funding paid directly to services in year 1 of the scheme, of which €210.8 million was entirely new funding to the sector.
Core funding increased by 11% to reach €287 million for the second year of the scheme (September 2023 to August 2024). The allocation of this additional funding in year 2 of the scheme was informed by the emerging data from Year 1 as well as data from an independent financial review of sessional services and feedback from stakeholders.
In year 2, new targeted supports - aimed at improving the sustainability of smaller and sessional services – were introduced. These include a flat rate allocation of €4,075 for all sessional-only services, and a minimum base rate allocation of €8,150, which will benefit small, part time and school-age services.
Core Funding increased by another 15% to €331 million for the current and third year of the scheme (September 2024 to August 2025). Again, the allocation of this additional funding in year 3 of the scheme was informed by the emerging data from previous years as well as feedback from stakeholders. Targeted supports for small and sessional services in Year 2 of Core Funding were enhanced in Year 3. Specifically, the flat rate allocation was set at €5,000 (increased from €4,075 in Year 2) for sessional-only services, and the minimum base rate allocation was set at €14,000 (increased from €8,150 in Year 2). Moreover, while the fee freeze continued in Year 3 for most services, and in response to concerns raised by some providers, there was also changes to fee management in Year 3, including:
• A fee increase process for certain providers
• A fee cap
Key achievements of the scheme to date include:
• High participation rates among services, with 93% of providers participating in year 3 of the scheme and a higher number of providers in absolute terms when compared to previous years;
• A fee freeze in the majority of services;
• A 29% increase in the number of services offering the NCS since 2022;
• Supported the agreement of Employment Regulation Orders in 2022 (that resulted in improved pay for more than 70% of those working in the sector) and again in 2024 (that resulted in improved pay for more than 50% of those working in the sector)
• Extended support for graduate-led provision outside the ECCE programme, with almost 3,000 services now receiving Graduate Premiums;
• Improved stability of funding for services contributing to the lowest number of service closures in the last 6 years; and
• A significant expansion of capacity, with analysis showing the increased capacity is the type of capacity that is in highest demand relative to supply
Budget 2025 makes additional funding available for year 4 of Core Funding. These increases will bring the full year allocation for year 4 of Core Funding (September 2025-August 2026) to €350.64 million. A further €45 million for the full 2025/2026 programme year has been ring-fenced specifically to support employers to meet the costs of further increases to the minimum rates of pay in the sector. Combined, and contingent on the third successive Employment Regulations Orders, the Core Funding allocation will exceed €390 million in year 4. Again, the allocation of this additional funding in year 4 of the scheme is being informed by the emerging data from previous years as well as feedback from stakeholders.
The new Programme for Government, which was published on 15 January 2025, commits to review and increase Core Funding, ensure that providers’ fees are open, transparent and equitable and readily available to parents, and to maintaining the fee cap.
The scope of that review will be considered in the context of broader and related commitments in the Programme for Government to improve affordability, access, availability and quality.
