3046. Deputy Edward Timmins asked the Minister for Children, Disability and Equality given the number of childcare facilities withdrawing from core funding will she consider allowing the facilities to charge the market rate so that they are not at a competitive disadvantage compared to new facilities; and if she will make a statement on the matter. [59039/26]

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. 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 fee freeze means that in return for funding through the scheme, services that sign up for Core Funding agree not to raise their fees above what was charged to parents on 30 September 2021. This is to ensure that the State’s significant investment through the Scheme is not absorbed by unnecessary fee increases. For services who were not in existence on this date, they are permitted to set their fees at their own discretion, but must adhere to their fees as set on the date that they signed their Core Funding Partner Service Funding Agreement.

Maximum fee caps were first introduced for new entrants to the Scheme in September 2024. They were then lowered and extended to all Partner Services in September 2025 and September 2026 sees further reductions in these fee cap thresholds.

This established a minimum level of affordability beyond which services would not be able to participate in Core Funding. Increases in Core Funding will help offset the reduced fee income they would have received from parents, ensuring that services are not disadvantaged by the fee management system.

To assist with viability concerns, in Programme Year 3 (2024/25) the Department ran a Fee Increase Assessment process. Partner Services charging fees below the county average were eligible to apply to be assessed for a fee increase. This process ensured that services, who had fees which may not have been sustainable, were given the opportunity to apply for a fee increase while still remaining within Core Funding.

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 have 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.

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.

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 into a Funding Agreement 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, 177 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 had left Core Funding at one point over the lifetime of the scheme to this date but later rejoined. Information provided by Pobal, the scheme administrator, indicates that a total of 8 services have formally withdrawn from the Core Funding Scheme in 2026, of which 3 services have since re-joined the scheme.

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.