Conor Sheehan (Limerick City, Labour)
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136. To ask the Minister for Children, Disability and Equality the measures her Department is taking to address the rising number of creches that are facing closure due to rising costs; if her Department will increase funding to creches to ensure that they can remain open as they play a vital role in our society; and if she will make a statement on the matter. [61693/25]

Norma Foley (Kerry, Fianna Fail)
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Data from the Tusla Early Years Inspectorate on new service registrations and service closures showed a net increase of 226 in the overall number of services in 2024, including the lowest number of service closures in the past six years.

Core Funding is a supply-side grant to early learning and care (ELC) and/or school-age childcare (SAC) providers towards their operating costs. It is designed to deliver, among other things, sustainability for providers through substantially increased funding to the sector, paid on a consistent and equitable basis.

The introduction of Core Funding in 2022 brought a significant increase in investment for the sector. €259 million of funding was made available for services in year 1 of the scheme, of which €210.8 million was entirely new funding to the sector.

Core Funding increased by 11% to reach €287 million for the second year of the scheme, which began in September 2023. This increased investment facilitated capacity growth in the sector, extended support for graduate leadership and the introduction of targeted supports for small and sessional services.

The funding available for Core Funding increased by another 15% to reach €331 million for the third year of the scheme which began in September 2024. This supported further growth in the sector with additional funding aimed towards capacity for children under the age of three. It also allowed for the strengthening of the targeted supports for small and sessional services.

This September, I again increased the funding available for Core Funding to exceed €390 million for the current and fourth year of the scheme. This is an increase of over 50% since the scheme began in September 2022. The additional funding is supporting further capacity growth, the maintenance of a fee management system to benefit families and significant improvements to pay and conditions in this valued sector.

I was delighted to announce further investment in Core Funding in Budget 2026. The additional funding being made available in 2026 will see the allocation for Core Funding in the next programme year which begins in September 2026 increase to €436.54 million. That is an additional €43.90 million on the current full year allocation, or an 11% increase.

This increased investment will allow for further increases in capacity across the sector, and will support Partner Services in adhering to the fee management conditions of the grant including reductions in the maximum fee caps from September 2026. This will guarantee that Core Funding’s monetary protections will continue to be passed on to families while ensuring sustainability and stability for the sector.

In addition to the increased level of Core Funding for year 4 of the scheme, there are wider financial supports available from the Department where a service is experiencing financial difficulty or has concerns about their viability, which can be accessed while remaining within Core Funding.

Once a service engages with their local City/County Childcare Committee, they will be able to avail of supports through the case management process, this support can take the form of general operational supports as well as more specialised advice and support appropriate to the individual circumstances of a service.

The Department also offers Sustainability Funding to services where issue/s have been identified through the Case Management process that have the potential to have serious consequences for their viability.

Sustainability Funding is intended to prevent significant issues that threaten the viability of a service from occurring in first instance, and any service seeking these supports should contact their City or County Childcare Committee.