2916. Deputy Mark Ward asked the Minister for Children, Disability and Equality the number of childcare facilities that have left the core funding scheme in the past five years; if additional funding will be given to providers under the scheme; if the scheme will be reviewed and updated; and if she will make a statement on the matter. [60312/26]

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

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 Information provided by Pobal, the scheme administrator, indicates that a total of 8 services have formally withdrawn from the Core Funding Scheme in 2026, of which 3 services have since re-joined the scheme.

In relation to withdrawals specifically, services may choose to leave the scheme mid-year for a multitude of reasons including being denied a fee increase, temporary closures, financial difficulties, administrative requirements and personal reasons such as retirement. Many services have left and later re-joined the scheme.

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.

Within the Core Funding allocation for the 2025/26 programme year, €45 million has been ringfenced to support employers in meeting the costs of further increases to the minimum rates of pay across the sector, as set out under the updated Employment Regulation Orders.

Further investment in Core Funding was announced in Budget 2026, increasing the allocation for Core Funding in the next programme year from September 2026 to over €480 million. This represents an increase of over €90 million, or 23%, on the current full year allocation.

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.

The increased allocation also includes up to a maximum of €45 million to support providers to meet possible additional cost of increases in minimum rates of pay for early years educators and school-age childcare practitioners through independently negotiated rates of pay by the early years services Joint Labour Committee.

Consequently, over 2 years, the Department has made an allocation of €90 million available to support possible increased rates of pay.

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