A trade association representing Irish childcare providers has warned that “spiralling inflation” is threatening the viability of many businesses in the sector and has called on the Government to boost funding for creches in Budget 2023.
Under a new scheme announced by Minister for Children Roderic O’Gorman last October, childcare and early learning services will be asked to freeze the fees they charge parents from September in return for access to the Government’s new €221 million “core funding” scheme.
It is hoped the scheme will allow the Government to control the cost of childcare with creches passing on savings to parents.
But some business owners and representative bodies for the sector have said the fee freeze will hamper their ability to meet rising operating and administrative costs.
More than 100 people rallied outside the Dáil last Wednesday to protest the scheme, which they say will reduce revenues, leaving them unable to respond to wage demands and other new expenses.
On Monday, Childhood Services Ireland (CSI), the Irish Business Employers Confederation (Ibec) association representing Irish childcare providers, said surging wage, food and energy prices represented a serious threat to the future of businesses in the sector given that it would not be able to increase prices to offset the impact of inflation.
In a pre-budget submission, the group said the Government needed to boost the core funding scheme package by €10 million just “to cover inflation costs”.
‘The childcare sector is going through a delicate period of transformation and we need to make sure childcare providers and parents’ needs are met in Budget 2023,” said Darragh Whelan, director of CSI. “The increase of inflation this year means we have to deal with these issues much sooner than previously planned.
“We urgently need to help providers by providing €10 million to help them meet inflation demands and hire the staff they need. They can’t raise their fees so they need this fund to keep providing a service,” Mr Whelan said.
To address affordability issues for parents, CSI said the Government should also look to triple the universal subsidy under the National Childcare Scheme from 50c per hour to €1.50 and increase the household income threshold for the targeted subsidy from €60,000 to €80,000.
Additionally, CSI said €70 million in capital grant funding could address availability issues in the sector, allowing service providers to expand to meet rising demand.
‘’Availability of childcare is the other big issue we need to address,” Mr Whelan said. “I am hearing stories of people putting their names on waiting lists before they even conceive, which is a crazy situation but that is how difficult it is to get childcare places. We need to help childcare services expand to meet demand, and this will further bring down the cost of childcare for parents.”
In a statement last week, the Department of Children said new data indicated there had been a “record increase in early learning and childcare providers signalling their intention to expand their services”. It also said the number of closure notices it had received, via Tusla, was down 16 per cent compared with 2019, the most recent pre-Covid year available for comparison.
