Norma Foley (Kerry, Fianna Fail) | Oireachtas source

Core funding is a grant to early learning and childcare providers towards their operating costs. The primary objectives of the core funding scheme are to improve pay and conditions in the sector and affordability for parents while also ensuring a stable income for providers. Providers have flexibility in how they spend their core funding grant, provided it aligns with the approved areas of expenditure outlined in the funding agreement. However, research shows that staff costs account for approximately 70% of the total operating costs of providers.

The introduction of core funding in September 2022 brought a significant increase in investment for the sector, with €259 million of funding paid directly to providers in year one of the scheme, of which €210.8 million was entirely new funding. This funding increased to €287 million in year two and by a further 15% in year three of the scheme and now stands at €331 million of an investment. For year four of core funding, commencing this September, the core funding allocation will exceed €345 million. An additional allocation of €15 million, from September to December 2025, which equates to €45 million across the 2025-26 programme year, has been specifically ring-fenced to support employers in meeting the costs of further increases to the minimum rates of pay in the sector and is contingent on updated employment regulation orders being negotiated by the independent joint labour committee. This would bring the total year four core funding allocation to more than €390 million.

The estimated cost to employers of implementing previous employment regulation orders has been calculated based on information provided by providers. The estimated cost to services of the employment regulation orders given effect in September 2022 was approximately €55 million and was supported through the year one core funding allocation of €259 million. The estimated cost to services of the employment regulation orders given effect in June 2024 was €20.1 million and was supported by increased core funding in year two and year three allocations of €287 million and €331 million, respectively.

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