2825. Deputy Eoin Ó Broin asked the Minister for Children, Disability and Equality her plans to review core funding; if it will be reviewed specifically for services that have frozen fees for a number of years, in light of the rapidly increased costs of running their business; if she is aware some services in Dublin mid-west are leaving the model resulting in parents paying higher fees; if actions are intended to avoid services being forced to leave the funding model; and if she will make a statement on the matter. [56150/26]

I am aware that a small number of services are regrettably considering withdrawing from or no longer participating in the Core Funding scheme.

The Department, through the local Childcare Committees (CCCs), engages directly with any such service to highlight the benefits of staying in Core Funding, not only for their service but also for the families who avail of them. I am hopeful that the providers may reconsider their decision.

As Core Funding is an optional scheme, services have the autonomy and business freedom to not participate in or withdraw from Core Funding.

However, as of July 2026, we are seeing the highest numbers of services participating in the Core Funding scheme since the scheme was launched, with 93% of all eligible providers signed up to the fourth year of Core Funding which equates to over 4,600 services.

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 pleased to recently announce the details of further investment for the upcoming Core Funding programme year. The additional funding being made available will see the allocation for Core Funding increase to over €480 million from September 2026. That is an additional €90 million on the current full year allocation, or a 23% increase.

This increased investment will allow for further increases in capacity across the sector, with €21.4 million specifically set aside to support Partner Services in adhering to Core Funding fee management conditions, including reductions in the maximum fee caps, from September 2026. 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.

For the majority of services, they will see an increase in their Core Funding to help them to continue to adhere to the fee freeze. A minority of services (about 12%), who will be required to reduce their fees under the maximum fee caps, will receive increased Core Funding to offset the reduced fee income they would have received from parents. No service will be left behind because of Core Funding fee management.

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.

In addition to the year-on-year increases, 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.

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.

Under the 2024/2025 Fee Increase Assessment process, services charging low fees could apply to increase their fees up to an approved level, subject to a detailed assessment process by the Department

The Core Funding Funding Agreement allows for the launch of a fee increase assessment type exercise, subject to Ministerial discretion. The criteria for the Sustainability Review 2026/2027 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 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.

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.

Since Core Funding was introduced, its effectiveness has been subject to ongoing assessment, which has facilitated the iterative evolution of this scheme.

An evaluation of the first year of Core Funding and the development of an evaluation framework for Core Funding is currently underway. This project will examine the early implementation of Core Funding and make recommendations for future evaluations of the grant supporting efficient and expedient reviews of subsequent years of the scheme.

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.

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.

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.

I am confident in the adequacy of Core Funding 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 maximum fee caps.

Under the Core Funding Partner Service Funding Agreement, Partner Services must comply with the rules of the Core Funding scheme, such as the associated fee management measures and minimum notice periods. In line with the Core Funding Partner Service Agreement, services 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.

As of November 2025, 15 services based in South Dublin had left Core Funding at one point over the lifetime of the scheme to this date but later rejoined. A further 16 services had left and continued to operate outside of the scheme. Information provided by Pobal, the scheme administrator, indicates that no additional services have formally withdrawn from the current year of the scheme to date.