I acknowledge the viewpoints of childcare providers regarding the operation of the Core Funding scheme, and I wish to assure them that the Department has taken steps to ensure the scheme remains viable.
Core Funding offers supply-side funding to services to support them with their operational costs. Core Funding operates alongside all other early learning and childcare programmes and constitutes additional income to services on top of these programmes (and parental fees) towards a service’s 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; and
• Sustainability for providers through substantially increased funding to the sector, paid on a consistent and equitable basis.
As Core Funding is an optional scheme, service providers have the autonomy and business freedom to withdraw from or choose not to participated in Core Funding, even though this will result in the loss of the significant financial support it offers them and the substantial benefits and certainty it brings to families.
It should be noted that. as of 3 November 2025, there were 5,035 services listed as being open on the Early Years Platform, of which 177 (4%) had left Core Funding at one point over the lifetime of the scheme to this date and continue to operate outside of this scheme. A further 415 services (8%) had left Core Funding at one point over the lifetime of the scheme to this date but later rejoined and were signed up to fourth year of the scheme on this date.
The overwhelming majority of services, 4,157 or 83%, have continued to participate in Core Funding from the date on which they first signed up for the scheme.
It should be noted that of the 592 services that have left the scheme at one point, some 415 services were contracted to Core Funding as of 3 November 2025 – meaning over 70% of services who left the scheme at one point have now returned to Core Funding.
One of the key features of Core Funding is the introduction of a system of fee management, to ensure that affordability measures are passed on to parents/guardians. This began with an effective fee freeze from September 2022. In return for significant funding through the scheme, Partner Services (i.e. services that have an active Core Funding Partner Service Funding Agreement) agree not to raise their fees above what was charged to parents as at 30 September 2021. For Partner Services who were not in existence on this date, they must adhere to their fees as set on the date that they signed their Core Funding Partner Service Funding Agreement.
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 to the sector.
While the State cannot mandate providers to participate in the scheme, Core Funding has been designed with maximum participation of providers in mind as reflected in the year-on-year growth of investment in the Scheme (rising from €259 million in year 1 to over €390 million in year 4). 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 over €480 million. That is an additional €89.3 million on the current full year allocation, or a 23% increase.
A key condition of receiving the significant State funding that is available through the Scheme requires that a Partner Service adhere to the Core Funding fee management system, which includes a freeze on fees at 2021 levels and fee caps. This is to ensure that the State’s significant investment through the Scheme is not absorbed by unnecessary fee increases. This approach to stabilising fee rates in the sector is in line with the recommendations outlined in Partnership for the Public Good, the Expert Group report which was accepted by all of Government in December 2021.
The medium term of the Expert Group’s recommendations, corresponding to the period between September 2024 to August 2026, has brought significant changes to the fee management system as the Department has introduced more direct fee management measures, including fee caps on all Partner Services and controlled fee increases. In the spirit of partnership between the State and Partner Services, these measures promote fairness in the market while supporting affordability for parents.
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 in 2024 a fee increase assessment and approval process for services with fees frozen at unsustainably low rates.
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 allocation for Core Funding’s fifth programme year will include €20.6m in brand new full-year funding to support services to maintain fee management conditions, such as the fee freeze and new maximum fee caps supporting affordability for parents. 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.
Full details of Core Funding programme year 2026/2027 will be made available to the sector later this year.
I am happy to confirm that the coming year’s Core Funding will not be dependent on linking services.
It should be noted that uptake of Core Funding remains strong. As of 11 May, 93% of all eligible providers have signed up to the fourth year of Core Funding, with the highest number of Scheme participants at any point since its launch in 2022.
I acknowledge the increase in administration for providers with the introduction of schemes such as the NCS and Core Funding. A number of steps are being taken to reduce the administrative workload. In relation to Core Funding, improvements have been made to the application module since the commencement of Core Funding including a cloning facility, to enhance the user experience. A Universal Fee Table has been in place since 2023, which enables services to upload one single fee table that covers all schemes. The Parent Statement has also been refined so that one agreement now covers all schemes, and this only has to be signed once between the provider and parent irrespective of fee changes.
Funding to support administration costs for providers is included in Core Funding. This replaces the Programme Support Payments (PSP), which supported early learning and childcare providers in meeting the costs arising from the administrative work associated with the Department’s schemes, and for the time required to perform activities outside of contact time with children. The budget previously allocated to PSP has now been incorporated into Core Funding. In addition, the contribution towards staff pay and conditions under Core Funding takes account of both contact time and non-contact time.
I am confident in the adequacy of the new funding model for this sector. However, there is a safety net in place for the small number of services who may for any number of reasons require additional supports, to ensure that they can continue to provide this vital service for the public good without needing to withdraw the benefits that Core Funding achieves for parents such as fee freezes and caps.
All services are encouraged to avail of these supports if they are facing difficulties with the sustainability of their business. Contact details for the CCCs can be found at the City and County Childcare Committees page on gov.ie.