Since Core Funding was introduced, its effectiveness has been subject to ongoing assessment, which has facilitated the iterative evolution of this scheme.
An evaluation of the first year of Core Funding and the development of an evaluation framework for Core Funding is currently underway. This project will examine the early implementation of Core Funding and make recommendations for future evaluations of the grant supporting efficient and expedient reviews of subsequent years of the scheme.
While the Department cannot mandate providers to participate in the Core Funding Scheme, every effort has been made to carefully design Core Funding to meet the policy objectives including to achieve high levels of participation by providers, as reflected in the growth of State investment in the Scheme.
When first introduced in 2022, Core Funding had an annual allocation of €259 million, of which €210.8 million was entirely new funding to the sector. That annual allocation has increased each year since beginning in 2022 and exceeds €390 million for the fourth, and current, year of Core Funding. This represents an increase of over 50% in Core Funding over three years.
Further investment in Core Funding was announced in Budget 2026. The additional funding being made available will see the allocation for Core Funding in the next programme year, which starts in September 2026, increase to over €480 million. This represents an increase of over €90 million, or 23%, on the current full year allocation. This included €21 million in funding dedicated to support Partner Services in adhering to the Core Funding fee management conditions from 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 the fee freeze and maximum fee caps. This is to ensure that the State’s significant investment through the Scheme is not absorbed by unnecessary fee increases.
Fee Caps were first introduced in September 2024, applying only to First-Time Partner Services, meaning services that were contracting to the scheme for the first time in year 3 of Core Funding (September 2024 – August 2025). Fee caps were applied to all Partner Services from September 2025. The cap was applied only to the highest fees charged to parents. The fee cap has gradually been reduced in line with the goal to achieve the ongoing policy towards the standardisation of fees charged to parents and of income received by Partner Services.
In June 2026, the details of maximum fee caps for all Partner Services in Core Funding from September 2026 were confirmed. This will lower the maximum fees that can be charged by early learning and childcare services which participate in Core Funding. Approximately 12% of services will be required to reduce at least one fee.
The Department is conscious of the importance of promoting affordability for parents without compromising the viability of businesses in the sector, and appropriate safeguards are carefully considered during planning for new developments. The maximum fee cap and increased State investment from Budget 2026 are important steps towards the Government’s commitment to progressively reduce the cost of early learning and childcare to €200 per month per child during the lifetimes of the Government.
In addition to the year-on-year increases in the Core Funding allocation, the Department has made changes to improve the sustainability of providers through, for example, targeted measures for small and sessional services, and a fee increase assessment and approval process for services with fees frozen at unsustainably low rates.
Moreover, the annual changes to the allocation model and in the conditions attached to the funding has ensured the Scheme remains responsive, balancing the needs of providers while seeking also to meet a range of other objectives. Among these objectives is ensuring taxpayers’ money is being used in a way that sustains services while not excessively increasing their private profit.
The Department will explore further changes based on the operation of year 5 of the Scheme as well as stakeholder input and income and cost data from providers. The Department will continue to engage with the sector and continue to develop the scheme so that it can continue to see the high uptake levels it has seen this year, and indeed since it was launched in 2022.
The NCS has undergone a number of enhancements in recent Budgets with the minimum NCS subsidy steadily rising from €0.50 in 2022 to €2.14 in September 2024 alongside extensions to eligibility. Additionally, since September 2024, the NCS has been open to Tusla-registered childminders who wish to participate in the scheme. Families availing of childminders who are participating in the NCS can claim a subsidy towards their costs. Further enhancements to the income-assessed subsidy are being introduced from September 2026, raising the base threshold from €26,000 to €34,000 and the maximum threshold from €60,000 to €68,000, with additional increases to the multiple child discounts.
Shaping the Future: The Early Years Action Plan, Phase 1 report (published on the 17 of December 2025) sets out measures to achieve key Programme for Government commitments on the affordability, quality, and accessibility of early learning and care and school-age childcare. The Action Plan adopts a phased approach that enables action to be taken in 2026 while allowing adequate time for a broad public consultation and analysis on longer-term actions, which will be set out in a second report to be published by the end of 2026.
Currently, services that provide the Early Childhood Care and Education (ECCE) programme and/or the National Childcare Scheme (NCS) are not required to take part in Core Funding, reducing the impact of the NCS as some families are not benefiting from the fee-control measures (fee-freeze and fee caps) or additional funding for quality provision that is provided by Core Funding. This will also be the case for the coming programme year 2026/2027.
However, the Phase 1 report of Shaping the Future states that a roadmap will be set out for Phase 2 to ensure that all publicly funded providers are supported to take part in Core Funding.
As noted in the Phase 1 report, this will include measures to reduce the administrative burden for providers of participating in publicly funded schemes.
Phase 2 of Shaping the Future is in development and will be published by year end.