UPDATE: Project details updated during the EPSA 2025-26 edition. Awarded Special Recognition for continuous improvement and long-term sustainability.
Context
In Ireland, early learning and childcare services operate based on a market system, whereby services are delivered through private providers (whether for-profit or not-for-profit) who are generally free, within regulatory and contractual constraints, to manage their own operations. Due to a variety of historical and cultural factors, the involvement of the state in this sector has been less in comparison to European counterparts. First 5: a Whole of Government Strategy for Babies, Young Children and their Families, published in November 2018, sets out an ambitious programme of work across government departments to improve the experiences and outcomes of children in Ireland from birth to age 5 across all aspects of their lives. To meet these challenges, an Expert Group was established to examine the existing funding model, its effectiveness in delivering quality, affordable, sustainable and inclusive services. It was also to consider how additional resourcing could be delivered for the sector to achieve these objectives, drawing on international evidence and case studies in this area.
In December 2021, detailed proposals for a new funding model for the early learning and the childcare sector were made to government by the Expert Group in their report, Partnership for the Public Good: A New Funding Model for Early Learning and Care and School-Age Childcare. From their research and analysis of the sector, the Expert Group identified several major issues, which the new funding model aimed to address through a range of reforms to the early learning and childcare sector, and Ireland more broadly.
Objectives
In September 2022, ‘Together for Better’, the new funding model for early learning and childcare, was launched. This funding model supports the delivery of early learning and childcare for the public good, for quality and affordability for children, parents and families as well as stability and sustainability for providers. Together for Better is aimed at addressing the needs of (1) providers to have a stable and sustainable source of funding to deliver high-quality early learning and childcare; (2) parents to have access to high early learning and childcare at an affordable rate; (3) staff to have higher wages and better working conditions; (4) children, with particular emphasis on disadvantaged children, to have higher quality early learning and childcare; (5) the state to have detailed operational and financial information about the sector to better inform future policy decisions.
Implementation
Core funding, which began in September 2022, was worth €259 million in full year costs in year one to start this partnership for the public good between the state and providers. The budget has been increasing annually, reaching €331 million in 2024. The implementation of the Expert Group’s recommendations constitutes historical reforms for early learning and childcare, and is having a large beneficial impact on the sector. The latest data on service closures and new service registrations, drawn from the official register at end September 2023, shows very positive data such as a five-year low in the number of net services closures, such as day-care centres and preschools, or a net increase of 183 after-school childcare services.
Developments
Since the submission of the initial project application, Core Funding has undergone a series of significant developments based on evidence, sector feedback, and evolving policy priorities. The team has also grown with 27 people now working on the scheme.
A key advancement has been the reassessment of service needs, which led to important refinements in the funding model; adjustments to minimum and maximum base rate allocations, and the introduction of targeted supports for smaller services, including the flat rate top up payment for services registered as sessional only and a minimum and maximum base rate allocation. These changes support long-term service viability by basing allocations on staffed capacity and ensuring smaller services are protected.
The integration of lessons learned has also been central to the project’s evolution. A major operational improvement has been the introduction of application cloning, enabling most services (97%) to easily reproduce prior year application data. This refinement directly responds to the provider’s feedback and reduces administrative burden, contributing to more efficient and accurate annual renewals. Lessons learned have also informed enhancements to the Quality and Inclusive Practice Plan process, with clearer templates and strengthened guidance to support quality.
Regarding strategic alignment, there has been an introduction of a new funding element, the Staff Funding Additional Contribution (SFAC), to support centre-based services meeting the costs of increasing rates of pay as a result of the new and updated Employment Regulation Orders negotiated by the independent Joint Labour Committee since the last application.
Further progress has been made through the redesign of key activities and milestones, in particular the evolution of fee management. In response to continued engagement with the sector, a Fee Increase Assessment (FIA) process was introduced in 2024/2025, whereby 1145 services underwent a structured assessment, using financial and child enrolment data, if seeking to increase fees due to the potential of being unviable. Furthermore, fee caps were introduced, whereby services must reduce their fees below a maximum level. Combined FIA and fee caps are the first steps to further advance the Core Funding fee management system and reduce the extreme variations in fees.
Strengthened fee management requirements, including fee freezes and the obligation for partner services: milestones relating to service quality have been expanded through mandatory QIPPs and year end reporting, ensuring measurable, continuous development in pedagogy, inclusion, and governance.
Institutional and administrative capacity for the model’s implementation has also been significantly reinforced. The Core Funding Contractual Requirements Reporting System validated annual financial reporting and strengthened accountability measures. These developments enhance transparency and allow for robust public oversight while supporting feasible and scalable implementation across the sector.
Finally, procedures for ensuring cost-effectiveness have been strengthened through ongoing review of the most up-to-date data available to the Department. Transparent reporting obligations, which allow for the Department to analyse the cost of delivery, ensure that public investment is efficient, equitable, and targeted towards long-term system sustainability.
Together, these developments show a responsive and operationally robust scheme the Early Learning and Care sector.
Long-term impact
The Core Funding model delivered significant long-term impacts across the early learning and childcare sector, with clear progress against initial objectives.
Analysis of Consumer Price Index childcare-related expenditure of 35.7% between December 2022 and December 2025, indicates that households are now allocating a smaller portion of their budgets to childcare. This aligns with Core Funding’s purpose: reducing financial pressure on families while supporting providers through a stable public revenue stream. The scheme also complements the National Childcare Scheme (NCS) by ensuring that increases to NCS subsidies benefit families rather than being absorbed by uncontrolled fee increases.
Participation continues to grow, with more providers contracted to Core Funding now than in Year 1 and 93% of eligible services participating. This sustained high uptake reflects confidence in the model and demonstrates its effectiveness in supporting provider viability.
The scheme has also contributed to meaningful improvements in pay and conditions. Through a stronger financial base and the introduction of mechanisms such as the SFAC payment, Core Funding has supported implementation of Employment Regulation Orders and contributed to structured, stable pay scales across the sector. As a result, pay rates across the sector have grown 29% on average from 2021–2025.
A major achievement is the creation of a more detailed data environment. The scheme’s reporting requirements produce comprehensive information on service operations, finances, capacity, and workforce, enabling more effective public oversight and evidence-based policy development. Transparency has also increased through mandatory publication of fees and the requirement for Parent Statements, enhancing accountability and supporting informed decision-making for families.
Continuous stakeholder engagement – including ongoing collaboration with County Childcare Committees, Pobal, providers, and stakeholder forums – is central to refining the model. This engagement verified positive outcomes and ensured that Core Funding remains responsive to sector needs while advancing national policy goals.
Adjustment in the objectives
A significant driver of objective adjustment is the Programme for government commitment to introduce a maximum monthly cost of early learning and childcare of EUR 200 per child. This accelerates the need to strengthen and advance fee management, ongoing development of fee caps, and other fee management conditions underpinning affordability.
Institutionalising Core Funding required expanded organisational capacity, including additional departmental staff, with new roles established for data analysis, financial oversight, provider engagement, and governance functions, and increased use of city/county Childcare Committees and Pobal, whose operational expertise supported implementation. During the FIA process, staff were temporarily redeployed to manage workloads.
The policy environment also highlighted the need to deepen public management capabilities within an entirely private basis (95% operating on a ‘for profit basis’). Continuous adjustment of scheme objectives supported this growing understanding, particularly in areas such as financial transparency, accountability obligations, and the alignment of public investment with service delivery outcomes. The scheme offers a model for managing public investment in other sectors reliant on private or voluntary providers.
The scheme’s adaptability and continued ministerial support ensured its central role in the wider early learning and childcare reform agenda, helping secure long-term stability and alignment with government priorities.