Norma Foley (Kerry, Fianna Fail)
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Since the Scheme was introduced, its effectiveness has been subject to ongoing review and the scheme itself has evolved year on year.

Core Funding has seen consistent increased State investment to the sector year on year, and is set in year 4 to be worth over €390 million contingent on the establishment of new minimum rates of pay in the sector through updated Employment Regulation Orders (ERO).

This is an increase of over 50% since the scheme began in September 2022 with an allocation of €259 million.

The continued implementation of the Core Funding scheme for the third programme year and into the fourth programme year from September 2025, will support improved affordability and accessibility for families, improved pay and conditions for the workforce in the sector, and improved sustainability for providers.

From September 2025, when year 4 of Core Funding begins, over €390 million will be available through Core Funding. The increased Core Funding available from September facilitates:

• Support for providers in meeting the costs of increases in minimum pay rates as a result of newly negotiated Employment Regulation Orders by the independent Joint Labour Committee;
• Increased funding for early learning and care capacity offered to ensure Partner Services can keep pace with rising costs without needing to increase fees charged to parents;
• An increase to the minimum amount of funding a centre-based service will receive, increasing to €14,400 per year from the current level of €14,000;
• A reduction in the maximum allocation for a services capacity to €450,000 to best spread a limited budget across the entire sector; and
• Funding to support capacity growth of 3.5% across the sector.

This provides stability to services, and reduces the risk associated with opening a new service or expanding an already existing service. For the current programme year, the allocation for Core Funding allows for a 6% increase in capacity. Additional funding was secured in Budget 2025 to facilitate a further 3.5% increase from September 2025, in the fourth programme year.

As per the latest data, there are 140 services who remain open and operational, who had previously contracted into Core Funding year 1 or 2, and have not contracted into Core Funding for the current programme year.

As of 28 July 2025, 8 services have withdrawn from Core Funding during this programme year September 1 2024 - August 31 2025.

Participation in Core Funding is optional but it remains open to all registered providers subject to their agreement to the terms and conditions of the funding. It is a matter for providers to decide whether they wish to sign up to Core Funding, the significant financial supports it offers to providers and the certainty it gives to parents through the associated fee management measures.

While a service provider intends to withdraw from Core Funding, they remain eligible in this programme year to provide the National Childcare Scheme, the Early Childhood Care and Education programme and the Community Childcare Subvention Plus Saver programme.

My Department continues to support the ongoing development and resourcing of Core Funding which has given rise to a significant expansion of places since the scheme was first introduced. Core Funding, which is in its third programme year, funds services based on the number of places available.

Currently, 92% of eligible services have signed up to Core Funding year. This equates to over 4,400 services, and means that more services have opted into the scheme this year, than in programme years one or two.

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. Findings from the project are expected in Quarter 4 2025.

This project is being undertaken by Irish Government Economic and Evaluation Service or IGEES policy analysts working in the Research and Evaluation Unit of my Department.

IGEES is an integrated cross-government service established in 2012 with the objective of enhancing the role of economics and value for money analysis in public policy making. It is part of the Department of Public Expenditure, NDP Delivery and Reform.

Supports are available from my Department where a service is experiencing financial difficulty or has concerns about their viability, accessed through local City/County Childcare Committees.

I encourage services to avail of these supports as an alternative to withdrawing from Core Funding and removing the benefits of this Scheme to parents.