Dáil Éireann Debate, Thursday - 20 November 2025
555. Deputy Michael Murphy asked the Minister for Children, Disability and Equality her Department's long-term vision for childcare sector reform, including the way in which she plans to balance affordability for parents with sustainability for providers; if further structural changes to the funding model are under consideration; and if she will make a statement on the matter. [65059/25]
View answerThe Department’s long-term vision for the sector is set out in First 5, the Whole-of-Government Strategy for Babies, Young Children and their Families 2019-2028. Work is currently under way to develop the final 3-year implementation plan under the First 5 strategy, to cover the years 2026-2028, with a view to publication early in 2026. In addition, the Programme for Government commits to "undertake a broad consultation and publish a detailed Action Plan to build an affordable, high-quality, accessible early childhood education and care system".
Officials in the Department are continuing to develop this Action Plan which will look at affordability, access and quality of the early learning and care (ELC) and school-age childcare (SAC) system. These three attributes – affordability, accessibility and quality – are closely connected and the ways in which they interact are complex. It will be essential that we make progress in all three areas in parallel in order to deliver on our vision.
Officials are working on an integrated approach to minimise the risk of unintended consequences and to identify opportunities to address multiple policy challenges at the same time. For example it is essential that measures to improve affordability are designed in such a way that they serve to strengthen the quality of provision and do not unintentionally impact negatively on the sustainability of services at the same time.
The Department already provides targeted funding and supports for services facing sustainability challenges. The Department also oversees a system of case management through which local City and County Childcare Committees assist services with issues and difficulties that arise. Support can take the form of assisting services with interpreting analysis of staff ratios and cash flow, general operational supports and financial support for partner services, as well as more specialised advice and support appropriate to individual circumstances. In some instances, financial supports may be deemed appropriate in tandem with the case management process.
While work on developing the Action Plan is ongoing, we are already taking initial steps to deliver on key commitments in the Programme for Government. Budget 2026 enables Core Funding to continue to support fee-control measures and will also allow for growth in the sector. The allocation for Core Funding in 2026 will ensure fees remain at 2021 levels for a majority of providers. As well as this, there will be a new maximum fee cap set to reduce costs for families paying the highest fees across the country. Further details of the new, lower maximum fee caps will be announced in the coming months.
The 2026 allocation for Core Funding will also support implementation of the recently announced Employment Regulation Orders, which led to a 10% increase - on average - in the minimum rate of pay for early years educators, school-age childcare practitioners and for other roles in the sector from 13 October.
There will also be enhancements in Year 5 of Core Funding - from September 2026 - to further improve pay for educators and school age childcare practitioners with implementation of new Employment Regulation Orders.
Further steps will be detailed in the Action Plan on Accessible, High Quality, Affordable Early Learning and Care and School-Age Childcare, which the Department is continuing to develop. The Action Plan will be informed by a broad consultation process and will set out plans to achieve Programme for Government commitments, including the commitment to reduce maximum monthly fees to €200 over the lifetime of the Government.
I will provide further detail on the Action Plan and the consultation process at the earliest opportunity.
The Department is fully committed to promoting affordability for parents and viability for businesses through Core Funding, the supply-side grant to early learning and childcare providers towards their operating costs. Core Funding is designed to promote affordability for parents and sustainability for providers through increased funding to the sector, paid on a consistent and equitable basis.
The additional funding being made available in 2026 will see the allocation for Core Funding in the next programme year which begins in September 2026 increase to €436.94 million. That is an additional €44 million on the current full year allocation.
The additional funding being made available in 2026 will allow for a 4.2% increase in growth of the sector in year five of the scheme. This growth increase will be driven both by new services joining the sector and existing services offering more places and/or longer hours to families. €14.45 million has been secured for this purpose in a full programme year.
When contracting to Core Funding, service providers agree to abide by the Scheme’s fee management system, which includes a fee freeze at September 2021 levels and maximum fee caps.
Maximum fee caps, which were introduced for new entrants to the Scheme in Year 3, have been reduced and extended to all new and existing Partner Services in Year 4.
Under these new fee caps, the fee for a full day place – of between 40-50 hours per week, the most common full day care operating hours – can be charged at no more than €295 per week (before State subsidies under the National Childcare Scheme (NCS) and the ECCE programme are deducted), with a fee cap of €354 for more than 50 hours of care.
€20.6 million in brand new full-year funding was secured in Budget 2026 to support providers in adhering to Core Funding fee management conditions, including further reductions in the maximum fee caps in the fifth year of the Scheme. This will guarantee that Core Funding’s monetary protections will continue to be passed on to families while ensuring sustainability and stability for the sector.
