1073. Deputy Niall Collins asked the Minister for Children, Disability and Equality to reply to the matters raised in correspondence (details supplied); and if she will make a statement on the matter. [65466/26]

I am aware that TLC Childcare is regrettably considering not participating in Core Funding in the 2026/2027 programme year, commencing this month.

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. I remain hopeful that the provider may reconsider their decision.

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.

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.

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 €482 million in year 5). This represents an increase of over 86% in Core Funding in four years.

In addition to this increased allocation, participation 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.

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.

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.

I have agreed to a revised version of this process for year 5 of Core Funding - the Sustainability Review Process - which will give services charging particularly low fees the opportunity to increase up to an approved level. This seeks to strike a balance between the protection of affordability for parents and the interests of services, refining eligibility criteria to target particularly vulnerable services around the country where fees have been frozen at low levels since at least 2021. Any sanctioned fee increases will be implemented after September 2026.

The Sustainability Review has robust procedures to protect parents from any unnecessary fee increases. All providers who apply to the sustainability process will have their financial data analysed to determine if there is a need for any increase. The maximum allowable increases as part of the Sustainability Review will not exceed the level of the recent reductions in maximum fees, which range from €3 per week in Band A (less than ten hours per week) to €18 per week in Band F (50-plus hours per week).

Any approved fee increases will not exceed the median fee for that Band in that region, and fee increases will be limited in the Sustainability Review Process 2026/2027 to vulnerable services charging the very lowest fees and incorporating robust protections for parental affordability into any new process. This targeted approach on low fees was implemented as a complementary support to the very significant funding increases secured for Core Funding for year 5. Core Funding year 5 allocations will increase state income to all Partner Services and negate the need for fee increases for services charging fees above the Regional Median Thresholds.

There are 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.