Dáil Éireann Debate, Tuesday - 25 November 2025
779. Deputy Barry Heneghan asked the Minister for Children, Disability and Equality the actions her Department is taking in response to reports from early-years childcare operators that rising costs are placing unsustainable pressure on services, resulting in over 150 creches withdrawing from the Government scheme (details supplied); and if she will make a statement on the matter. [66026/25]
View answerIt should be noted that of the 507 services that withdrew from Core Funding in the first three years of the scheme, 356 of these services were contracted to Core Funding as of August 5, 2025 - meaning over 70% of services who withdrew, subsequently returned to Core Funding.
The Department, through the local Childcare Committees, engage directly with any such services to highlight the benefits of staying in Core Funding, not only for their services but also for the families who avail of them. The Department is hopeful that other providers may reconsider their decision, as so many others have over the past three years.
Core Funding is a supply-side grant to early learning and care (ELC) and/or school-age childcare (SAC) providers towards their operating costs. It is designed to deliver:
• Affordability for parents through ensuring no increases in fees, capping the maximum fees that can be charged, and offering the National Childhood Scheme (NCS) and the Early Childhood Care and Education (ECCE) programme to all eligible children;
• Quality in services, including through better terms and conditions for staff and supporting graduate leadership in services, to strengthen practice and delivery of high-quality experience for children; and
• Sustainability for providers through substantially increased funding to the sector, paid on a consistent and equitable basis.
When first introduced in 2022, Core Funding had an annual allocation of €259 million. That annual allocation has increased each year since and has exceeded €390 million for year 4 of the Scheme, which started in September. This represents an increase of over 50% in Core Funding in three years.
I was delighted to announce further investment in Core Funding in Budget 2026. 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 almost €437 million. That is an additional €44 million on the current full year allocation, or an 11% increase.
This increased investment will allow for further increases in capacity across the sector, and will support Partner Services in adhering to the fee management conditions of the grant including reductions in the maximum fee caps from September 2026. 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.
In addition to this increased allocation, being in Core Funding unlocks additional supports for services to access, including access to enhanced support for services caring for concentrated numbers of children facing disadvantage through Equal Start and opportunities to apply for capital grants through the Department.
The base rates in Core Funding have been developed using the various components associated with the cost of delivery of service provision such as: staff pay and conditions (including contact and non-contact time, holiday pay, sick pay and other employer costs such as pension contributions); administrative staff/time, and non-staff overhead costs. These components have been factored into the calculation of the budget for Core Funding since the scheme began in 2022.
Although the cost of delivery components such as improvements to staff pay have been used to derive the base rates, the eligible areas of expenditure of the Core Funding grant are much broader. Partner Services can choose how to spend their Core Funding grant in accordance with the approved areas of expenditure outlined in the Funding Agreement.
In addition to the increased level of Core Funding for year 4 of the scheme and in Budget 2026, there are wider financial supports available from the Department where a service is experiencing financial difficulty or has concerns about their viability, which can be accessed while remaining within Core Funding.
Once a service engages with their local City/County Childcare Committee, they will be able to avail of supports through the case management process, this support can take the form of general operational supports as well as more specialised advice and support appropriate to the individual circumstances of a service.
The Department also offers Sustainability Funding to services where issue/s have been identified through the Case Management process that have the potential to have serious consequences for their viability. As part of the Case Management process, in which local City or County Childcare Committees (CCCs) assist services with issues and difficulties that arise, the CCC may refer Core Funding Partner Services facing difficulties to Pobal and the Department to be considered for Sustainability Funding.
The Department of Children is aware that a small number of service providers have regrettably chosen to withdraw from the Core Funding scheme. However, uptake of Core Funding remains strong. The fourth year of Core Funding began on 1 September and as of 20 November there were over 4,550 services signed up to Year 4 of Core Funding, a 5 per cent increase on this time last year. This is the highest number of Partner Services in Core Funding at any point since the scheme was launched in 2022 and the number continues to grow.
