Context
Core Funding is a supply-side grant which requires Partner Services to comply with fee management conditions, including a freeze on fee rates, in return for significant state investment.
The scheme was launched on the foot of recommendations laid out in the Expert Group’s Partnership for the Public Good report. Among the report’s recommendations regarding fees include short-term stabilisation of rates, with a view to more direct management of fee structures in the medium to long term.
The launch of unprecedented new investment into the sector through Core Funding in 2022 created the conditions to freeze parental fees at September 2021 levels, establishing price stability in the sector while reducing direct costs to families through the National Childcare Scheme’s demand-side subsidies.
A wide disparity of fee rates existed in the sector prior to the Core Funding, which left both very high fees and very low fees in place under the fee freeze. As the scheme progressed, more direct fee management measures were introduced including a universal fee table to standardise fee information, fee caps on the highest fees, and the Fee Increase Assessment process – where services charging low fees could apply to increase their rates to support sustainability without breaching the fee freeze.
Objectives
The Fee Increase Assessment process was introduced to respond to viability pressures emerging for some Partner Services whose fees had been frozen at very low levels. The objective was to put in place a structured mechanism whereby Partner Services charging low fees could apply to the Department to increase their fees up to an approved level, subject to a unit cost analysis of their business, without breaching Core Funding fee management rules.
Eligibility was confined to Partner Services meeting minimum criteria, and listing at least one fee entry on their fee table below the county average threshold. Applications were invited and processed on a phased basis, prioritising services operating for the longest period without a fee increase.
A key priority in the development and implementation of this new process was to ensure that parents or guardians would be protected from having to bear additional costs. Any fee increase was capped at the equivalent increase in the National Childcare Scheme universal subsidy from September 2024 (EUR 0.74 per hour), up to a maximum of EUR 33.30 per week for services providing 45 hours of care or more per week. In all cases, written approval from the Department was required before a service could increase any fee.
Implementation
The Fee Increase Assessment process was implemented via a robust governance structure. Partner Services applied through their local City/County Childcare Committee (CCC), who issued and received a self‑declaration form, verified eligibility criteria linked to programme readiness, and supported services to complete the Child Enrolment Data required for their assessment.
Within the Department, applications and processing were managed through defined teams with clear responsibilities, including a processing team, quality assurance team, and decision makers, with a separate team managing appeals and reviews. Workflow management mechanisms, including regional cluster groups, tracking templates, and standard operating procedures, supported consistent processing. Shared tools and templates, including the Unit Cost Calculator and standard letter templates, supported accurate assessment and clear communications.
Communications were supported through published guidance and regular engagement with CCCs, including scheduled weekly check‑ins. Once the Department received a completed application, a template notice letter for parents/guardians issued regarding a potential fee increase. Decisions were communicated through formal decision letters issued to the CCC, who then forwarded the letter to the applicant.