€16.5m boost and end to fee caps vital for future-proofing childcare sector – CSI

Childcare Services Ireland (CSI), the Ibec trade association representing childcare providers across the country, is calling on the Government to increase Core Funding for Partner Services by 5%, equivalent to €16.5 million, in Budget 2026. The increase is essential to maintain and improve the quality, accessibility, and sustainability of early years and school-age childcare services across the country.

CSI is also campaigning for the removal of the income cap applied to the base rate of Core Funding for certain providers. This restriction, while intended to target investment, has become a barrier to growth and is discouraging both expansion by existing providers and new market entry, particularly by international operators seeking to invest in the Irish childcare sector.

Director of CSI, Stephanie Roy said:

"While fee freezes and caps may appear to offer short-term relief to parents, they undermine the long-term sustainability and quality of childcare provision. International models demonstrate that affordability and access can be achieved more effectively through direct investment and targeted subsidies, rather than blunt price controls.

“In the Irish context, it is time to remove the fee freeze and cap regime, and move toward a model that empowers providers, supports families, and builds a high-quality, sustainable childcare system.”

The current regime of fee caps and freezes, introduced in recent years, may offer perceived short-term relief to families. However, CSI warns that these measures are now undermining the very foundations of a high-quality childcare sector. By limiting revenue potential and growth, they are impacting providers’ ability to invest in staff, facilities, and service development.

In its submission to Government ahead of Budget 2026, CSI outlines a pathway forward:

• A €16.5 million increase to the Core Funding base, ensuring continued quality and capacity.
• The removal of income caps on Core Funding to encourage growth, innovation, and international investment.
• A phased exit from the current fee freeze and cap regime, replacing it with a model that supports affordability through public funding while empowering providers to meet the needs of families.

CSI has submitted a proposal for a new funding model that reflects the diversity of the sector and recognises the specific needs of rural, urban, small, medium, and large services.