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. This funding increased by 11% in year 2 (to €287 million). The scheme increased by a further 15% in year 3 (to €331 million).
I secured additional funding of nearly €20 million in Budget 2025 for Year 4 of Core Funding. This brings the full year budget for Core Funding Year 4 to a minimum of €350 million.
In addition, a maximum of €45 million in State funding to support services to meet costs of increased minimum rates of pay in the sector will be made available to services from September 2025 onwards. This maximum of €45 million is contingent on the establishment of new minimum rates of pay in the sector through updated Employment Regulation Orders.
From September 2025, when year 4 of Core Funding begins, over €390 million will be available through Core Funding. The increased Core Funding available from September facilitates:
• Support for providers in meeting the costs of increases in minimum pay rates as a result of newly negotiated Employment Regulation Orders by the independent Joint Labour Committee;
• Increased funding for early learning and care capacity offered to ensure Partner Services can keep pace with rising costs without needing to increase fees charged to parents;
• An increase to the minimum amount of funding a centre-based service will receive, increasing to €14,400 per year from the current level of €14,000;
• A reduction in the maximum allocation for a services capacity to €450,000 to best spread a limited budget across the entire sector; and
• Funding to support capacity growth of 3.5% across the sector.
Pay is one of a number of issues impacting the early learning and childcare workforce. The level of pay for early years educators and school-age childcare practitioners does not reflect the value of their work for children, families, society and the economy.
As the State is not the employer of staff in the sector, neither I nor my Department can set wage levels or determine working conditions for staff in the sector.
The Joint Labour Committee is the formal mechanism established by which employer and employee representatives can negotiate minimum pay rates, which are set down in Employment Regulation Orders.
I acknowledge the Joint Labour Committee is independent in its functions, and I do not have a role in its statutory negotiation processes.
However, outcomes from the Joint Labour Committee process are supported by Government through Core Funding.
I recently met with Joint Labour Committee representatives, to acknowledge the Committee's important role and to outline the Government’s continued support for the sector as a whole and, as outlined in the Programme for Government, for the Joint Labour Committee process.
I outlined to representatives that Government expects the funding secured to support the costs of increased minimum pay rates is used for its intended purpose and that any new Employment Regulation Orders would utilise the full amount available.
Therefore, it is vitally important that the Committee engage in productive negotiations about ensuring that the high level of investment being made through Core Funding for improved pay is fully maximised.
I look forward to the Joint Labour Committee negotiated outcomes.