Providers express concerns about the future of the childcare sector

New subsidies announced by the Department for Children last week have left local childcare providers concerned about the future of the sector.

From Monday (2 September), the minimum hourly allowance under the National Childcare Scheme for children under 15 will increase by 53% – from €1.40 to €2.14.

For families using Tusla-registered early childhood education and childcare services, the grant increase will mean a cost reduction of up to €96.30 per week per child. The hourly grant under the NCS Sponsorship Scheme, which makes special provisions for vulnerable children, will also be increased.

Anne Clarke, who has been in the business for 25 years, says the last three years have been the “most stressful time” of her career, attributing this entirely to the introduction of core funding in 2022.

Core funding is a grant to early childhood education and childcare providers towards their operating costs. It requires services to agree to the terms of the scheme, including fee management and financial transparency. Such terms, which include a fee cap, are becoming increasingly difficult.

In 2022/2023, there were three out of 77 childcare facilities in Cavan that did not register for core funding.

The most parents will have to pay at Playaway from this week is €73.70. Anne worked out the cost last week. Two children attending the centre Monday to Friday from 8am to 6pm will pay €50 per week. If a child is over two years and eight months old and is on the Early Childhood Care and Education Scheme, they will pay €41.30 per week.

“This is pathetic. It's because my fees are frozen,” she said.

“I can't survive. You can't carry on with the fees from 2016.”

“She [The Department of Children] We cannot pay subsidies to parents at the expense of providers.”

The root of the problem appears to be that the funding model has not kept up with the times since its introduction in November 2019, and costs have not increased, even though costs were already incurred before then. The system introduced a fee freeze, whereby childcare providers are not allowed to increase their fees since 2021. For Anne, the fees paid are the same as they were 10 years ago.

“From 2016 to 2024, inflation and the cost of everything have risen immeasurably. Core funding has not offset any fee increases I would have made in those few years,” she complains.

Anne gave the example of the blue rolls that children and employees need to dry their hands. Before Covid-19, a pack of six of the blue rolls cost her €4.99. Today, the same pack costs €15.

“Those are the things, the little things, that have all gone up,” she said.

“This year they have acknowledged the fact that the fee freeze is a problem,” she said, describing the “abhorrent” application she is putting together to prove her institution needs a fee increase.

“The dog in the street knows that whoever pays the fees for 2016 should increase them,” said an angry Anne.

This process began two weeks ago, but providers do not know when and by how much they can increase their fees if they are accepted. On the one hand, Anne is afraid to tell parents that fees might increase.

“I have been in the business for 25 years and have never stood at the door and not been able to tell parents how much their school fees would be.

“The Ministry [for Children] have put me in this situation and it is a disgrace.”

“All of these parents also have to make do with their budget, but I can’t tell them how much their fee will be because I have no influence over that at all.

“They have messed the whole thing up, and it is the local educators and parents who are suffering the most.”

On the other hand, Anne needs the increase to remain viable and if she does not receive it, she will consider exiting core funding.

“If I don’t [get the fee increase] well, then I have to remember that I am not going to throw away the business that I have worked hard for for 25 years.

“Then I have to take a business standpoint and say: I can't do this anymore. I have to increase the fees for the parents.”

Employee retention

After paying an accountant to crunch figures for the Department for Children, Anne is now calling on the Government to sit down and determine the true cost of childcare, fund the sector properly and pay staff a “fair wage” so that services can retain them.

“Until that happens, there is no point in building capacity and building useless things because you will have the same problem.

“There will be no capacity expansion until they do something about funding because they can't get staff.”

“There are nurseries around Cavan that have no rooms and cannot open because they cannot get staff.

“That’s the problem,” she explained.

“The whole thing is a complete and utter mess,” she said, adding that “nobody is to blame here, only the ministry [for Children].”

“All these things that they issue policies on, they don't talk to the people on the ground. They have no idea what they're talking about, and in the end we try to negotiate directly with the parents.”

On Tuesday, Anne visited a parent at her facility who wanted to go back to work but could not find childcare.

“She was close to tears when she got to the door.

“She said, 'I have to quit my job because I can't get childcare.'

“My parents come here. It breaks my heart to have to look for a place every day.”

Anne referred to a 2019 report by the Organisation for Economic Co-operation and Development (OECD) which lists public spending on early childhood education and care, which ranks Ireland fourth from last, followed by Costa Rica, Cyprus and Turkey.

“We are so underfunded,” she said of the current situation.

Low wages

Nicola O'Reilly, manager of the Circle of Friends in Killeshandra, says core funding “benefits our service” but says it “falls nowhere near what childcare workers deserve”.

“As far as the expenditure on the service is concerned, it does not meet the requirements.”

“It is very difficult to provide for children aged one to three. We cannot increase our fees, but the costs of running a daycare centre continue to rise.

“The care needs of a one-year-old are significantly different from those of a 12-year-old in afternoon care.”

Due to core funding, Nicola had to change her accounting model from January to December to September and August, requiring additional accounts.

“I had to change all that, and it cost me money to change all that to get core funding.

“Some services received funding to cover these costs, but we were not selected.

“Many services do not receive any support for this, and I find that unfair.”

Two-stage

“There is no equality among us, everyone is selected differently. Even with the subsidies they just announced for child care,” she said, claiming that community-based services seem to receive more benefits than private ones.

“We offer the same services, our staff must still have the same qualifications.

“This has to change. We have to be seen as equals, regardless of whether we operate at the municipal or private level.”

Nicola also hopes for a fee increase for her services.

“The fee increase is a big deal for us at the moment and we really hope we can do something to help increase our fees.

“We have not increased our fees in over five years and the costs of running this service are very different from when I opened five years ago.”

Before the core funding, she said, preschools received “various payments”, including “high payments” for the graduate staff in those spaces, and also paid a fee for administration costs. But now she feels she has “no choice” but to sign up for the core funding.

“It was that or nothing.”