Rising costs putting childcare providers out of business

Rising costs could force childcare providers out of business according to a West Cavan provider.

Paula Donohoe, owner of Clever Clogs Childcare Services in Ballyconnell, was involved in a recent protest to highlight the impact of inflation on the sector.

“We were involved in a protest to highlight the funding issues in our sector,” she told the Celt. “We are not being properly funded. We’ve never had a proper costing of our sector on what it costs to provide quality childcare.

“How can they claim we’re being properly funded? Small to medium-sized services are in trouble. I’m subsidising childcare on behalf of the government. That shouldn’t be my role.”

Paula says that Government funding that was introduced in late 2022 attempted to address shortfalls across the sector doesn’t go far enough.

“In September of last year we got a funding stream called Core Funding, which was really welcome. It was brought in to underpin the sustainability of services, affordability to parents, and quality measures. It was tied up with bringing better-paid conditions for staff. It was really well thought out and addressed imbalances in funding, but its funding rates were set before inflation rates skyrocketed.”

As part of accepting the funding childcare providers had to sign up to a fee freeze which means they are caught in limbo.

“We couldn’t raise our fees, which was to make things more affordable for parents but inflation wasn’t taken into account.

“The fee freeze chose 2021 as the base year. In 2021 we were well funded by the government and were asked to voluntarily freeze fees.

“I’m now stuck with fees that are out of date and can’t move beyond that. You can’t expect service to survive on a fee structure that is outdated. The gap needs to be plugged. If they want affordability. The two pieces of string don’t meet.

“Our costs are now greater than our income. Our costs have risen across the board. For example our electricity cost €450 Jan 2021, €770 Jan 2022, €1120 Jan 2023. Core funding didn’t allow for these rises.”

Paula says that despite looking for more funding she still wants services to remain affordable.

“At the minute there’s a gap of €30 per child to break even. All of our input costs have risen, like other businesses, but nearly every other business has a mechanism to cover their costs.

“We need a 15% hike in fees from the government to make it affordable for us and to cover the cost of inflation. I’ve never sweated over the bottom line in 16 years. I’m not calling for the fees to be passed on to parents.

“We’re looking for it to be brought up by inflationary costs.

Paula says that unless the problem is addressed, additional measures such as wage increases in the sector could be the final nail in the coffin for many childcare providers.

“SIPTU are looking to raise childcare worker wages by €2 per hour. If that came in under an employment regulatory order and I had no additional funding, I could not trade and it would be an non-viable business. I’ve always operated well and we enjoy a good reputation within the area. I don’t want to go with a begging bowl looking for money. Our waiting list is full. I need to be given an opportunity to continue to run my business. Good childcare is an essential cornerstone of a functioning economy.”