Colm Burke (Cork North-Central, Fine Gael)
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2501. To ask the Minister for Children, Disability and Equality to confirm that consideration would be given to reforming the core funding model for childcare centres, to provide additional funding for the scheme, to remove the cap on funding for childcare providers which has been reduced from €500,000 to €450,000, which may discourage childcare providers from continuing in the scheme; and if she will make a statement on the matter. [43901/25]

Norma Foley (Kerry, Fianna Fail)
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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. This is an increase of over 50% since the scheme began in September 2022 with an allocation of €259 million.

€45 million in State funding to support services to meet costs of increased minimum rates of pay in the sector will be made available to services from September 2025 onwards. This maximum of €45 million is contingent on the establishment of new minimum rates of pay in the sector through updated Employment Regulation Orders.

As with all State expenditure, there is a limited amount of funding available in a given year and adequate budgetary controls are required to ensure that expenditure does not exceed the funding allocated for a specific purpose.

The maximum Base Rate allocation is an enhanced budgetary control for Core Funding that is being introduced incrementally to manage and monitor the impact on individual services in a sustainable manner. It creates an upper limit for expenditure through the scheme.

This maximum Base Rate allocation was introduced in September 2023 for the second year of Core Funding. It maximises the efficiency of significant State investment in the sector, to best spread a limited budget across the entire sector rather than increasing funded capacity for the largest services.

This maximum does not apply to the Graduate Premiums and the new Staff Funding Additional Contribution, which will increase a Partner Service’s total allocation beyond this maximum base rate allocation.

When introduced, this maximum allocation was set at an annual value of €600,000. This was deliberately above what any service was in line to receive under the new increased Base Rates which took effect in September 2023. This was the first step in the incremental introduction of enhanced budgetary controls for Core Funding. 2023/2024 was a transitional year where the concept of an upper control was introduced to the sector in a considered and controlled manner, without impacting any individual service.

For Year 3 (2024/2025), the maximum Base Rate was reduced to €500,000. Again, this was done in a careful manner. My Officials identified the services who would be impacted by this measure and assessed the impact of the reduced maximum allocation on their funding. Five services are in receipt of this maximum allocation of €500,000 with graduate premiums bringing their grant higher. These are services who will be in receipt of some of the highest levels of funding from my Department nationwide.

From September 2025, the fourth year of Core Funding, I will be reducing the maximum allocation to €450,000. Based on current operating models, just nine Partner Services will be reaching this upper limit. I have carefully considered the impact of this upper limit of funding on these services.

Achieving value for money from this significant State investment is vital. The reduction in the maximum allocation from September will continue the incremental and measured introduction of enhanced budgetary controls for this grant whilst also allowing funding to increase for the smallest services around the country who would be more vulnerable to rising costs and fluctuating incomes.

I am confident that this measure will not make any service unsustainable. However, any service facing sustainability concerns can continue to avail of supports through my Department’s established case management process, through which local City and County Childcare Committees and Pobal work together to assess and provide support including financial support to services experiencing difficulties.

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.

Robert Troy (Longford-Westmeath, Fianna Fail)
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2502. To ask the Minister for Children, Disability and Equality if she will outline any proposed funding opportunities for community childcare buildings to improve their facilities given current funding seems to only allow for extensions rather than improvements. [43915/25]

Norma Foley (Kerry, Fianna Fail)
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Capital funding allocated to the early learning and childcare sector under the National Development Plan (NDP) has enabled significant investment in early learning and childcare.

In 2025, €25m in voted expenditure was made available for the Building Blocks Extension Grant Scheme. This allows existing Core Funding Partner Services to extend their existing premises or, in the case of community services, to construct or purchase new premises.

Previous Building Blocks schemes included the Building Blocks Expansion Grant, operated in 2024, and the Building Blocks Improvement Grant, operated in 2023. The Building Blocks Improvement Grant in particular allowed for retrofit works as well as green energy improvements.

The approach to capital investment in future years is being considered within the context of the Programme for Government commitments and the revised National Development Plan.

As part of the recent NDP review, published last week, the allocation for my Department has increased to €795 million over the next five years. This increased funding will be used in part to provide additional early learning and childcare places through future capital programmes, including potentially operating a further scheme similar to Building Blocks to support the expansion of provision by existing operators, as well as implementing the commitment to capital investment in State-owned facilities.

Further updates to potential future schemes will be issued by my Department once details are finalised.