I thank the Deputy for raising this query with my Department.
The introduction of Core Funding in 2022 brought a significant increase in investment for the sector, with €259 million of funding paid directly to services in year 1 of the scheme, of which €210.8 million was entirely new funding. This funding, which increased by 11% (to €287 million) in year 2, was increased again by another 15% in year 3 (to €331 million).
Fee management was introduced with the substantial investment of Core Funding following the recommendations of the Expert Group, in the Partnership for Public Good report. The first step of this process, which was approved by Government, was to limit increases in fee rates.
As part of the progressive development of the fee management system under Core Funding, the Department introduced new developments to fee management in year 3 of Core Funding.
The Fee Increase Assessment process and the introduction of a fee cap are the first steps to further advance this system of fee management in line with the recommendations outlined in Partnership for Public Good.
Up to now, services availing of Core Funding have not been allowed to raise their fees above what was charged to parents on 30 September 2021 (or at the point of first signing up for Core Funding if the service did not exist on 30 September 2021).
The fee freeze will remain in place for the majority of these services for year 3 of Core Funding, however, services whose fees have been frozen at a level that may not be sufficient to sustain their business even with increased funding available through Core Funding, had the opportunity to apply for a Fee Increase Assessment. This process closed for applications 29 November 2024.
Only services charging low fees (fees below the average in their county) were eligible to apply. The onus was on the provider to demonstrate a need for a fee increase.
The Fee Increase Assessment process must balance the need of parents for stability with their early learning and childcare costs and the need for providers to operate viable businesses in order to continue providing this Public Good service for their community. As such, my Department has placed limits on the scale of any approved increase to ensure services can continue to operate with protections in place for parents/guardians.
Any approved fee increases will not go above the increased universal NCS subsidy that a parent would be receiving for the full hours offered within the fee. This means that parents receiving the universal NCS subsidy for the full hours offered in these services will not face higher costs compared to this time last year.
Once the service was deemed eligible to enter into the application stage of the process, my Department issued a letter of notice of potential fee increase to services for issue to parents/guardians.
My Department will issue a letter to Partner Services who have been approved for a fee increase. This letter will include the new maximum fee which can be charged by the service, and the date it can be implemented from. The service must show this letter to parents/guardians before any fee increase takes place. A Partner Service will have to update the Partner Service Parent Statement. This must be circulated to parents within 10 working days of the sanctioned detailed fee increases being provided to parents.
Parents/guardians and their children can only avail of the benefits and protections that Core Funding creates, such as the effective fee freeze at 2021 levels, if their service has chosen to participate in the scheme as a Partner Service. Some Providers may choose to no longer participate in Core Funding and therefore, as private businesses, they are free to set their own fees. If such a service did choose to increase fees, this would not be in the controlled manner that the Fee Increase Assessment process under Core Funding creates.
If any parent /guardian has any concerns or questions about their fees or in the event that an individual wishes to raise a concern regarding a potential breach in fee conditions, the first step is to reach out to their local City and County Childcare Committee for support and guidance. Contact details for local City and County Childcare Committees can be found at gov.ie - City and County Childcare Committees .