Dáil Éireann Debate, Wednesday - 27 May 2026
180. Deputy Barry Ward asked the Minister for Children, Disability and Equality the mechanisms in place to allow for price increases by childcare centres that are within the core funding model; if there is a maximum increase allowable within the contract; the way in which that is calculated; and if she will make a statement on the matter. [40436/26]
Amharc ar fhreagraCore Funding is a supply-side grant to early learning and childcare providers towards their operating costs, designed to promote affordability for parents and sustainability for providers through increased funding to the sector.
When first introduced in 2022, Core Funding had an annual allocation of €259 million; €210.8 million of which was entirely new funding to the sector. That annual allocation has increased each year since and has exceeded €390 million for the current fourth year of the Scheme. This represents an increase of over 50% in Core Funding in three years.
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 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.
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.
The Fee Increase Assessment process required applicant services to demonstrate an objective case for a fee increase through submission of financial and operational data, which was then subject to a standard unit-cost analysis by the Department. This process opened on 31 July 2024, and closed on 29 November 2024.
The Core Funding Partner Service Funding Agreement allows for the recommencement of a further Fee Increase Assessment-type exercise, subject to Ministerial discretion. The details of this undertaking are being developed by the Department and will be made available to the sector once finalised.
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 in the coming weeks.
Partner Services facing sustainability concerns can also avail of supports through the Department’s established case management process, through which local City and County Childcare Committees and Pobal work together to assess and provide support including financial support to services experiencing difficulties.
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 (www.gov.ie/en/department-of-children-disability-and-equality/campaigns/city-and-county-childcare-committees/).
