Providers raise concerns over future of childcare sector

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

As of Monday (September 2) the minimum hourly subsidy under the National Childcare Scheme for children under 15 years will increase by 53% - from €1.40 to €2.14.

For families using Tusla-registered early learning and childcare, the subsidy increase represents cost reductions of up to €96.30 weekly per child; while the hourly subsidy under NCS sponsor referral programme, which makes special provision for vulnerable children, will also increase.

In business for the past 25 years, manager of Playaway Creche Anne Clarke reports the last three years have been the “most stressful time” in her career. She solely puts this down to the introduction of Core Funding in 2022.

Core Funding is a grant to early learning and childcare providers towards their operating costs. It requires services to agree to conditions of the scheme, including fee management and financial transparency. Such conditions, which include a cap on fees, are becoming increasingly difficult.

In the 2022/2023 year, there were three chilcare facilities in Cavan who did not sign up to Core Funding out of 77 facilities.

The highest amount any parent will be paying in Playaway from this week going forward is €73.70. Anne did costings last week whereby two children going to the facility, from Monday to Friday from 8am to 6pm paid €50 per week. If a child is over two years and eight months, and is on the Early Childhood Care and Education Scheme, they will pay €41.30 per week.

“It’s pathetic, it’s because my fees are frozen,” she said.

“I can’t survive, you can’t keep running on 2016 fees.”

“They [The Department of Children] can’t give the subsidies to parents on the back of providers.”

The root of the problem seems to be that the funding model has not moved with the times, or the expense increase, since its introduction in November 2019, with costs done before this. The system introduced a fee freeze, whereby childcare providers have not been allowed to increase their fees since 2021. For Anne, fees paid have been the same as 10 years ago.

“From 2016 to 2024 the inflation and cost of everything has gone sky high, Core Funding did not replace any increase in fees that I would have put in over them few years,” she fumes.

Anne gave the example of blue roll, which is required for the kids and staff to dry their hands. Before Covid-19, a six pack of blue rolls cost her €4.99. Today the same pack costs €15.

“That’s the kind of things, the small little things that have all gone up,” she said.

“This year they’ve acknowledged the fact that the fee freeze is a problem,” she said, describing the “hideous” application she is putting together to prove her facility is in need of a fee increase.

“The dog on the street knows that, if someone is on 2016 fees, they should have them increased,” said an exasperated Anne.

This process began two weeks ago, however providers are in the dark concerning when they will be able to increase their fees or by how much, that’s if they are accepted. On one hand Anne dreads telling parents that the fees may increase.

“I am 25 years in business and I have never stood at a door to parents and not be able to tell them how much their fees are going to be.

“The Department [for Children] have put me in this situation and it’s disgraceful.”

“All these parents have budgets to do as well but I can’t tell them what their fee is going to be because it’s totally out of my control.

“They have made a shambles of the whole thing and it’s the providers on the ground that’s suffered and the parents.”

On the other hand, Anne needs the increase to stay viable. In the case that she doesn’t receive it, she will consider pulling out of Core Funding.

“If I don’t [get the fee increase] well then I have to consider, I’m not throwing away my business that I’ve worked hard at for 25 years.

“Then I will just have to put the business head on and say, I can’t do this anymore. I need to increase the fees to parents.”

Staff retention

After paying an accountant to prepare figures for the Department of Children, Anne is calling on the government to “sit down and work out the true cost of childcare” and fund the sector appropriately and pay staff a “decent wage” to allow facilities to retain them.

“Until that happens, there’s no point in building capacities and building white elephants because you’re going to have the same problem.

“There will be no increase in capacity until they do something about the funding because they will not get staff.

“There’s creches around Cavan that are sitting with rooms they can’t open because they can’t get staff.

“This is the problem,” she outlined.

“The whole thing is a complete and utter mess,” she said, adding that there’s “nobody at fault here only the Department [for Children].”

“All these things that they make policies on, they don’t talk to the people on the ground, they haven’t a clue what they’re at and we end up trying to deal face to face with the parents.”

Anne had a parent at her facility on Tuesday who was hoping to return to work, however could not find childcare.

“She was near tears at the door.

“She said, I’m going to have to give up work because I cannot get childcare.

“I have parents coming here, it’s breaking my heart, everyday looking for places.”

Anne referenced an Organisation for Economic Co-operation and Development (OECD) report from 2019, which details the public spending on early childhood education and care, where Ireland is fourth from the bottom with Costa Rica, Cyprus and Türkiye below it.

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

Low wages

Manager of Circle of Friends in Killeshandra Nicola O’Reilly says Core Funding “does benefit our service” however said “it’s not meeting what childcare workers deserve to be paid at all.”

“As for the expenditure of the service, it’s not meeting the needs of that.”

“It’s very difficult to keep one to three year olds running, we can’t up our fees but yet the expense of running a creche is going up and up and up.

“The care needs of a one year old is very different to a 12 year old in afterschool.”

Core funding meant Nicola had to change her accounting model from January to December to September until August, with additional accounts required.

“I had to change all of that, it cost me money to actually do that for the benefit of getting Core Funding.

“There was funding given to some services to help with that cost, we weren’t chosen for that.

“A lot of services got no support for that, I think it’s unfair.”

Two tier

“There’s no equal between all of us, everyone is chosen differently. Even with the grants that they’ve just announced for childcare,” she said, claiming that community-based services seem to get more benefits than private ones.

“We’re running the same services, our staff still have to be of the same qualifications.

“That has to change, we have to be seen as equal whether we’re community based or private based.”

Nicola is also hoping to get a fee increase for her service.

“The fee increase is a big one for us at the minute, we’re really hoping that we can get something towards increasing our fees.

“We haven’t increased our fees in over five years and the cost of running this service is very different to when I opened five years ago.”

Before Core Funding, “different payments” would have been given to pre-schools with “high payment” for degree level staff in those rooms, with a fee also given towards administration expenses. However, she now feels she has “no other choice” but to sign up to Core Funding.

“It was that or nothing.”