So Why Can Parents Still Face Huge Fee Increases?

For thousands of Irish parents, childcare is not an optional expense. It is what allows them to go to work, run a business, study or simply keep their household functioning.

That is why the Government’s Core Funding programme is so important.

The principle behind the scheme is relatively straightforward: the State provides substantial funding directly to participating crèches and childcare services, and in return those providers accept conditions designed to protect parents, including restrictions on the fees they can charge.

On paper, this sounds like a sensible partnership.

But there is a significant weakness in the system.

Participation in Core Funding is voluntary.

A childcare provider can leave the scheme. Once outside Core Funding, it is no longer bound by the Core Funding fee restrictions and, as a private business, can set its own fees.

For parents whose children are already established in that crèche, that can create an enormous problem.

What is Core Funding?

Core Funding was introduced in 2022 as a new way of directly supporting Ireland’s early learning and childcare sector.

Its objectives include making childcare more affordable for parents, improving quality and helping childcare providers remain financially sustainable.

The scale of the programme has increased considerably.

Core Funding started with approximately €259 million in its first year. Funding subsequently increased to €287 million, then €331 million and more than €390 million for the 2025/26 programme year.

The Government has announced another substantial increase for the 2026/27 programme year.

In return for this public investment, participating services accept fee-management conditions.

One of the most important has been the effective freezing of fees at September 2021 levels for most participating services.

There are exceptions and mechanisms for approved increases, but the basic bargain is clear:

The State provides substantial financial support to childcare providers, while parents receive greater protection against rapidly rising childcare fees.

The Problem: A Provider Can Leave

Core Funding is not compulsory.

A private childcare provider can decide that participating in the scheme no longer suits its business and withdraw.

During a programme year, a participating service is generally required to provide three months’ written notice when withdrawing.

But there is an important additional issue.

If an existing provider simply decides not to enter a new Core Funding contract when the new programme year begins on 1 September, the Department has confirmed that it is no longer subject to the Core Funding Agreement and therefore is not subject to the same minimum notice requirement contained in that agreement.

Once outside Core Funding, the provider is operating as a private business and is no longer subject to Core Funding’s fee controls.

That creates a potentially serious affordability problem for parents.

Parents Don’t Have a Normal Consumer Choice

It might be argued that parents who believe a crèche has become too expensive can simply move their child somewhere else.

In reality, childcare doesn’t work like that.

A parent cannot necessarily shop around for another provider in the way they might change electricity supplier, broadband company or supermarket.

Childcare places can be extremely difficult to find.

A child may also have spent years in the same crèche. They know the staff. Their friends are there. The crèche may be close to the family home, school or a parent’s workplace.

Parents may have arranged their entire working week around its opening and closing hours.

So when a provider leaves Core Funding and increases its fees, the theoretical ability to “go somewhere else” may mean very little.

The parent can effectively face a choice between:

paying the higher price or potentially losing the childcare arrangement that allows them to work.

That is a very different type of consumer market.

There Is Evidence That Services Leave and Rejoin

This isn’t merely a theoretical feature of the system.

Government figures have shown that childcare services have left Core Funding and subsequently returned.

As of 5 August 2025, there were 4,807 childcare services registered with Pobal.

Of those, Government figures indicated that:

• 141 services had left Core Funding at some point during the previous three years and remained outside the scheme.
• Another 336 services had left Core Funding but subsequently rejoined.
• 4,056 services had participated continuously from the time they originally joined.
• 274 services had never participated.

In other words, 477 services had experienced a departure from Core Funding, and the majority of that group subsequently returned.

This demonstrates that leaving and later returning to Core Funding is a real feature of the system rather than a hypothetical possibility.

It is important, however, to clarify one point.

Current Core Funding rules state that a provider which withdraws and subsequently reapplies cannot increase its Base Rate on the new application simply as a consequence of leaving and returning.

Therefore, it would be incorrect to suggest that the rules explicitly allow a crèche to leave Core Funding, increase its fees and automatically lock that higher price into Core Funding by rejoining.

But that does not eliminate the underlying problem for parents.

Outside Core Funding, Fees Can Be Considerably Higher

Government figures also give us an indication of the difference between fees inside and outside Core Funding.

For full-day childcare in June 2024, the reported average weekly fee among Core Funding services was approximately:

€197.21 per week.

For the small number of non-Core-Funding services represented in that dataset, the average was approximately:

€227.29 per week.

The median figures showed an even greater difference:

€190 per week for Core Funding services compared with €250 per week for non-Core-Funding services.

The Government itself cautions, in effect, against drawing overly broad conclusions because the sample of non-participating providers was very small.

Nevertheless, it illustrates why losing the protection associated with Core Funding matters to parents.

A €50 Weekly Increase Is €2,600 a Year

Childcare prices also need to be considered in annual rather than weekly terms.

An additional:

€25 per week = €1,300 per year

€50 per week = €2,600 per year

€75 per week = €3,900 per year

€100 per week = €5,200 per year

And that is for one child.

For a family with two children requiring childcare, the effect can become enormous.

A significant increase in crèche fees can therefore wipe out much of a family’s annual pay increase or require thousands of euro of additional after-tax income.

This Is Not Just a Hypothetical Concern

There have already been reports of parents facing substantial increases following providers’ decisions to leave Core Funding.

The Department has acknowledged the issue.

It has said that when providers announce an intention to withdraw, City and County Childcare Committees and Pobal engage with those services and encourage them to remain within Core Funding.

The Department has also acknowledged that providers may leave for legitimate reasons, including financial difficulties, administrative requirements and being refused permission for a fee increase.

That is an important part of this debate.

Crèches Have Genuine Problems Too

It would be unfair to portray every childcare provider leaving Core Funding as simply trying to increase profits.

Crèches face substantial costs.

They have wages, insurance, rent or mortgages, energy bills, food, regulatory compliance, training and numerous other operating expenses.

The childcare sector has also struggled for years with recruitment and retention.

A fee frozen at an historically low level may genuinely make a particular childcare service difficult to operate.

The Government recognised this problem by introducing a Fee Increase Assessment process for qualifying providers whose fees were considered potentially unsustainable.

So the interests of providers cannot simply be ignored.

A childcare funding model that protects parents but causes childcare businesses to close would ultimately benefit nobody.

But equally, a funding system cannot claim to protect parents from excessive fees if families can suddenly lose those protections because their provider withdraws.

Government Is Spending More – Parents Need Certainty in Return

The level of taxpayer support being provided to the childcare sector is becoming extremely significant.

The Government announced more than €390 million in Core Funding for 2025/26.

For the programme year beginning in September 2026, funding is increasing substantially again.

This investment should be welcomed if it makes childcare affordable, improves wages for childcare workers, increases capacity and keeps good childcare businesses operating.

But increasing public expenditure should also increase accountability.

If hundreds of millions of euro of taxpayers’ money are being invested every year specifically to make childcare more sustainable and affordable, parents should have reasonable certainty about what childcare is actually going to cost them.

The Government Is Tightening the System

There have been important improvements.

From September 2025, maximum fee caps were extended to all Core Funding partner services.

For 2025/26, the maximum fee for the common 40–49 hours per week full-day category was set at €295 per week before NCS and other applicable supports.

For a parent receiving the universal NCS subsidy, the Government calculated that the resulting maximum parental contribution in that example would be approximately €198.70 per week.

Further reductions in maximum fees are planned from September 2026.

These are positive developments.

But they only fully protect parents while their provider remains within the scheme.

The Fundamental Weakness Remains

This brings us back to the central issue.

Core Funding attempts to control childcare prices through a voluntary agreement with private providers.

That creates an inherent tension.

The Government wants to control fees.

Providers need to remain financially viable.

Parents desperately need childcare places.

And providers retain the ability to operate outside Core Funding.

When a provider leaves, it is the parent who can suddenly find themselves exposed.

That is where the system needs further reform.

What Should Change?

The answer is not simply to force every crèche to accept an economically unsustainable fee.

Instead, Ireland needs a system that provides greater certainty for everyone involved.

Providers experiencing genuine financial difficulties should have access to a transparent mechanism allowing them to demonstrate their costs and seek an appropriate adjustment without having to leave Core Funding.

At the same time, parents need stronger protection against sudden increases when a provider withdraws.

One option would be to introduce a statutory notice period for major childcare fee increases regardless of whether the provider participates in Core Funding.

Another would be greater transparency.

Parents should be able to easily see:

• whether their crèche participates in Core Funding;
• how much public Core Funding that service receives;
• its registered fee structure;
• whether it intends to remain in Core Funding for the following year; and
• the protections parents will lose if the provider withdraws.

Government should also publish detailed statistics on providers leaving the scheme and the subsequent fees charged by those providers.

Remarkably, the Department acknowledged in a December 2025 parliamentary response that it did not directly track the fee levels charged by providers after they left Core Funding, although wider sector fees are monitored through the Annual Early Years Sector Profile.

If affordability is one of Core Funding’s principal objectives, this is precisely the information policymakers should be monitoring.

Parents Should Not Be Caught in the Middle

Core Funding has brought enormous additional State investment into Irish childcare and participation remains extremely high.

In September 2025, approximately 89% of eligible early learning and childcare services had already signed up for the fourth year, and participation subsequently rose further.

That is significant and should not be overlooked.

The scheme is clearly doing something providers value.

But the families who depend on childcare deserve more than high overall participation figures.

They need certainty.

A parent who has built their working life around a particular crèche should not suddenly discover that their childcare bill is increasing by hundreds of euro per month because the relationship between their provider and the State has changed.

And a provider should not have to choose between operating an unsustainable business and abandoning a Government funding programme.

Ireland is now investing hundreds of millions of euro every year in Core Funding.

The next stage of reform should therefore focus on closing the gap between funding childcare and actually guaranteeing affordable childcare for parents.

Because ultimately, Government childcare policy should be judged by a very simple question:

Can ordinary working families afford to use it?