Budget 2027: Core funding for childcare can be suspended 'at any time', says Department of Children 

The Core Funding system provides direct payments to childcare providers who maintain fees at 2021 levels. File picture 

The Department of Children has confirmed it can suspend the approval of childcare providers into the Core Funding system across 2026 and 2027. This system provides direct payments to childcare providers who maintain fees at 2021 levels.

The fund has received an increase of €114.3m. This assists childcare providers to keep fees at 2021 levels for most providers while allowing the fee cap to be cut.

One Government source said the measure was in place in case the department runs out of funding for the scheme.

They added if this happened, the department would make a case for additional funding.

The new expenditure controls have been confirmed across all Government departments, following overspends in 2026 in the Department of Education.

This requires all Departments to find savings of a cumulative €446m, with the Department of Children asked to save €42m.

Savings proposed by Government departments include:

• A review of processes for allocation and management of funding to councils for homelessness services;
• A review of Sport Ireland;
• No further staff to be hired within Passport Office;
• No extra staff for Department of Rural, Community Affairs and Gaeltacht;
• A review of the EU School Fruit and Vegetable scheme and School Milk scheme;

The Department of Housing has been asked to find savings of €5m. It suggests it will review the processes for allocation and management of funding for councils for homelessness services.

“This will further improve financial reporting and payment procedures in order to best support management of funds and value for money,” the report says.

It adds it will focus on more capital investment in State-owned homelessness facilities to reduce reliance on commercial operators.

In the Department of Culture, it confirms it will carry out a “Periodic Critical Review” of Sport Ireland as part of efforts to save €11m.

“The purpose of the review is to ensure that government expenditure allocated to Sport Ireland continues to deliver value for money and that its policies and agency structures are appropriate and meet the needs of the economy and society,” the department said.

The Department of Foreign Affairs has confirmed it will not hire any further staff in the Passport Office as part of efforts to save €18m.

This is despite estimates that it will see the processing of 200,000 more passports than 2026.

According to the Department of Agriculture, it is taking a number of actions to find €26m worth of savings.

This includes achieving a “comprehensive” sanitary and phytosanitary agreement between the EU and UK. It says this will allow it to redeploy staff who are currently working on compliance at border control posts.

On the School Fruit and Vegetable Scheme and School Milk Scheme, the Department said it wants to review them to “better align these schemes with the Hot School Meals scheme”.

In several areas, there has been a commitment for no further staffing, including at the Department of Rural and Community Development. It confirmed it has denied requests for additional staffing in 2027 within agencies inside its remit.

• Tadgh McNally is a Political Reporter.