242. Deputy John Paul O'Shea asked the Minister for Children, Disability and Equality the steps her Department is taking to engage with childcare providers on the impact of the core funding levels; if her Department can engage with a specific childcare provider (details supplied) on their concerns; the measures being considered to prevent childcare facilities leaving core funding; and if she will make a statement on the matter. [47910/26]

I am aware that TLC Childcare is regrettably considering not participating in Core Funding in the 2026/2027 programme year, commencing in September.As per the table below, TLC Education and Care Limited’s projected full-year Core Funding allocation across these 2 services for year 4 of the scheme is €541,229.78, representing an increase of 13% since joining the scheme. The projected allocation for this programme year figure includes funding specifically ringfenced for improvements to staff pay, to support the Employment Regulation Order that came into effect on 13 October 2025.

The Department, through the local Childcare Committee (CCC), has engaged directly with this service to highlight the benefits of staying in Core Funding, not only for their service but also for the families who avail of them. Limerick CCC has confirmed that the service is considering not participating in the 2026/2027 programme year. However, I remain hopeful that the provider may reconsider their decision.Under the Core Funding Partner Service Funding Agreement, Partner Services are required to comply with the rules of the Core Funding scheme, including minimum notice periods. In line with the Core Funding Partner Service Agreement, a service that is considering withdrawing from the scheme during a programme year must give 3 months’ notice of their intention to withdraw to the scheme administrator, and 3 months’ written notice to parents/guardians.However, if an existing Partner Service decides not to enter a contract for the new programme year starting on 1 September, they, as private businesses, would no longer be subject to the provisions of the Core Funding Agreement and, by extension, the required minimum notice period to the scheme administrator and parents/guardians. They are also not required to provide a reason for choosing not to reapply for Core Funding to the scheme administrator.

Core Funding is a supply-side grant to early learning and childcare providers towards their operating costs. It is designed to promote affordability for parents and sustainability for providers through 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 participate 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.

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 announced the details of further investment in Core Funding in recent weeks. The additional funding will see the allocation for Core Funding in the next programme year (which begins in September 2026) increase to over €480 million. This represents an additional €90 million on the current full year allocation, or a 23% increase.

In addition to this increased allocation, being in Core Funding unlocks additional supports for services to access, including:

• access to wider financial supports where a service is experiencing financial difficulty or has concerns about their viability;

• access to enhanced support for services caring for concentrated numbers of children facing disadvantage through Equal Start; and

• opportunities to apply for capital grants through the Department.

The Department has also 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.

As noted above, there are also wider financial supports available where a service is experiencing financial difficulty or has concerns about their viability. These supports can be accessed through the Department’s case management process, which can be accessed while remaining in Core Funding.

All services have been encouraged to avail of these supports as an alternative to withdrawing from Core Funding and removing the benefit of Core Funding to children and their families.

Participation in Core Funding is optional, but it remains open to all registered providers subject to their agreement to the terms and conditions of the Core Funding Agreement.

It is a matter for providers to decide whether they wish to sign up to Core Funding and avail of the significant financial supports it offers to providers and the certainty it gives to parents through the associated fee management measures.

It is worth noting that since the Core Funding was first introduced in 2022, its effectiveness has been subject to ongoing review and the Scheme itself has evolved year on year in response.

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.

It should be noted that uptake of Core Funding remains strong. The fourth programme year of Core Funding began on 1 September and as of 15 June, there were 4,647 services signed up to Year 4 of Core Funding. This represents 93% uptake of all eligible services. This is the highest number of Partner Services in Core Funding at any point since the scheme was launched in 2022.

I am encouraged by this rate of participation: it shows that the vast majority of families will continue to benefit from the scheme’s fee management conditions.

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.