Dáil Éireann Debate, Thursday - 18 December 2025
36. Deputy Shónagh Ní Raghallaigh asked the Minister for Children, Disability and Equality if her Department has carried out analysis of the profitability of small childcare providers in the context of historical core funding fee freezes; if she plans to review same; and if she will make a statement on the matter. [72583/25]
View answerThe introduction of Core Funding in 2022 brought a significant increase in investment for the sector, with €210.8m of entirely new funding made available in the first year. The scheme now provides over €390 million investment in this sector. I was pleased to announce that the State is increasing investment through Core Funding in 2026, with €480 million allocated for Core Funding in its fifth year which begins in September 2026.
Adherence to the Core Funding fee management system is a primary condition of receiving the significant State funding that is available through the scheme. The fee management system requires compliance with a fee freeze and the maximum fee caps. In year 3 of the Scheme, Partner Services charging fees that were frozen at very low levels could apply to the Department to increase those fees by approved amounts. Over 1,000 providers applied for this.
The financial viability of all early learning and childcare services will continue to be kept under review by the Department through analysis of financial returns under Core Funding Financial Reporting Requirements.
As part of a transitional arrangement, the reporting requirements for the first two years of the scheme were reduced to require just an income and expenditure report. These reports were submitted by registered accountants.
Insights from the financial returns for the first two years will not provide context on profit or loss across the sector as this information cannot be derived from this type of report.
However, analysis of the first two years financial data collected through Core Funding is underway and is scheduled to be completed in the first quarter of 2026.
This analysis will provide key insights into the early learning and care and school-age childcare sector and will strengthen the evidence base available to inform the development of policies and the allocation of funding for this sector.
From the third year of the scheme which finished in August of this year and thereafter, Partner Services will be required to submit a full trial balance via a registered accountant. The Year 3 returns are due to be submitted by the end of February 2026 and will be an important input to Phase 2 of Shaping the Future, Government's new action plan for the sector.
In addition, an evaluation of the first year of Core Funding and the development of an evaluation framework for the scheme is currently underway. This project will examine the early implementation of Core Funding and make recommendations for future evaluations of the grant. Findings from the project are expected in Quarter 1 2026.
In addition to this formal evaluation, since the Scheme was introduced, its effectiveness has been subject to ongoing review and the scheme itself has evolved year on year.
