2822. Deputy Ann Graves asked the Minister for Children, Disability and Equality if she will consider allowing providers greater flexibility to make reasonable fee adjustments where necessary, while ensuring childcare remains accessible and sustainable for all involved as in the case of a creche (details supplied); and if she will make a statement on the matter. [56096/26]

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 is not absorbed by unnecessary fee increases.

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.

Under the 2024/2025 Fee Increase Assessment process, services charging historically low fees could apply to increase their fees up to an approved level, subject to a unit-cost analysis of their business by the Department. I note that The Kilns Créche & Montessori applied to the 2024/2025 Fee Increase Assessment process, and were granted approval to increase the fees of all eligible sessions.

Per the Core Funding Funding Agreement, a new fee increase assessment can be run at Ministerial discretion. This would provide an avenue for eligible Partner Services to increase their fees to an approved level. There will be a Sustainability Review 2026/2027 process in advance of the beginning of Programme Year 5, with any sanctioned fee increases being implemented after September 2026.

The criteria for this process has recently been finalised, with the aim of identifying and supporting services whose fees remain at very low levels. An announcement informing services of the new Sustainability Review process will issue through the Department and also through the Early Years Hive. Eligible Partner Services will be contacted by their local CCC in the coming week to inform them of their eligibility and to see if they wish to undertake the assessment.

As per the table below, The Kilns Creche & Montessori’s projected full-year Core Funding allocation for year 4 of the scheme is €128,315.70, representing an increase of 34% 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.

This Core Funding allocation for The Kilns Creche & Montessori is paid to the services regardless of whether the places are filled or not filled. This provides services a guaranteed minimum income, supporting stability where attendance may be fluctuating.

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 the first year of the scheme to over €390 million for the current fourth year of the scheme). This represents an increase of over 50% in Core Funding in four years.

The allocation for Core Funding for year 5 of the Scheme will increase again by 23% to over €480 million. This will support the maintenance of fees at 2021 levels in Year 5 (guaranteeing that Core Funding’s monetary protections will continue to be passed on to families), support further improvements in pay for staff, and support services in adhering to reduced maximum fee caps from September 2026 – ensuring sustainability and stability for the sector.

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. There are also wider financial supports from the Department for services experiencing financial difficulty.

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.

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.

Participation in Core Funding is optional, but it remains open to all Tulsa 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 benefit from the significant financial supports it offers to providers and the certainty it gives to parents through the associated fee management measures.