Written answers

Tuesday, 30 September 2025

Department of Children, Disability and Equality

Childcare Services

Photo of Pádraig O'SullivanPádraig O'Sullivan (Cork North-Central, Fianna Fail)
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803. To ask the Minister for Children, Disability and Equality if consideration will be given to restructuring the core funding model for childcare services with a view to providing additional funding to the scheme, to increase the cap on funding of €750,000 for larger childcare providers, to encourage them to remain in the scheme; and if she will make a statement on the matter. [51957/25]

Photo of Pádraig O'SullivanPádraig O'Sullivan (Cork North-Central, Fianna Fail)
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804. To ask the Minister for Children, Disability and Equality if consideration will be given to restructuring the core funding model for childcare services with a view to removing the cap on funding for childcare providers, which has been reduced from €500,000 to €450,000; and if she will make a statement on the matter. [51958/25]

Photo of Norma FoleyNorma Foley (Kerry, Fianna Fail)
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I propose to take Questions Nos. 803 and 804 together.

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 has been 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 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. Officials from the Department analysed and assessed the impact of the reduced maximum allocation of funding on the potentially impacted services. Five services were in receipt of this maximum allocation of €500,000 for the last programme year, with graduate premiums bringing their grant higher. These are services who have been in receipt of some of the highest levels of funding from the Department nationwide.

From September 2025, the fourth year of Core Funding, I have reduced the maximum allocation to €450,000. Based on current operating models, just nine Partner Services’ base rate allocation will be reaching this upper limit and as noted above, the cap is not applicable to the new ringfenced funding for pay nor to graduate premiums, both of which result in bringing their total grant higher. 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 to €450,000 from this month 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 otherwise be more vulnerable to rising costs and fluctuating incomes.

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.

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

As of 26 September, 4379 services have signed up to the fourth year of Core Funding. This represents an increase of 5 per cent on this point in time last year. Core Funding remains open year-round to applicants and we will continue to see this number grow.

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