As Government Promises to Cut Childcare Costs for Parents, Some City Creches Ponder Whether to Go Along

For weeks the government has been talking about its big plans to help parents with childcare costs in this year’s budget.

Key to this effort is a new “core funding” scheme, but while most childcare providers have taken the first step towards signing up, some Dublin daycares are hanging back, still unsure as yet of whether to join.

That would mean parents with children in these creches, after schools and other services that don’t sign up wouldn’t benefit from the government’s push to help them.

Some childcare providers say they are put off signing up for core funding because of uncertainty about the start date. Others by the requirement that those who sign up freeze their fees.

Others say the application process is unnecessarily complicated. And others still, say they’d get less money than they do now by signing up.

This is because some funding streams that childcare providers may have been using are being absorbed by the core funding, and might not be directly replaced, says Frances Byrne, director of policy for Early Childhood Ireland, a childcare-provider advocate.

A Department of Children spokesperson said no “service” will see a decrease in funding. “Across the sector as a whole, there will be a very substantial increase in investment,” they said.

“For any service that does experience financial difficulties, a Sustainability Fund will be in place,” they said. That will provide an extra safety net for providers, said the spokesperson.

Big and Small

One indication of interest in the scheme comes from how many providers filled out a survey, called the Annual Early Years Sector Profile (AEYSP), which they have to do to be able to apply for core funding.

By 29 July, 971 providers based in Dublin had filled out that survey, said a Department of Children spokesperson last month.

There were 1,150 providers in the county in 2020/21, according to Pobal’s most recent report on the sector.

The quid pro quo behind core funding is that the government pays childcare providers, and providers agree to freeze fees for parents at their September 2021 rates.

Any future increases in subsidy rates under government schemes can’t then be swallowed up in higher fees for parents, but should instead be passed on so that the rates parents have to pay would fall.

The government has put €221 million into the pot for core funding for this year. Much of that, €138 million of it, is earmarked for creches to spend on improving pay and conditions for staff.

Of the rest, €25 million is for administrative staff time, €20 million for non-staff overheads, and €38 million to support the employment of graduates.

For childcare providers that sign up, the core funding will be on top of the subsidies they get from other government schemes, such as the National Childcare Scheme (NCS) or the Early Childhood Care and Education Programme (ECCE), as well as payment from parents, and sponsored referrals from Tusla, the Child and Family Agency.

But how much funding creches would get through this new model varies based on their opening hours, opening weeks, the ages of children and the number of places available.

Funding that some creches got from ECCE higher capitation, a funding stream which required staff in creches to have graduate degrees, and programme support payment, which supported creches outside of contact hours, are being incorporated into core funding, says Byrne.

The formula means that core funding works for large providers, but not small and medium ones, says Elaine Dunne, spokesperson for the Federation of Early Childcare Providers. “It doesn’t cover their costs.”

Larger creches can take on more children and so gain more from the funding model, she says. But smaller creches are limited because of the spaces that they’re run in, says Dunne.

Some small creches are now trying to increase their opening hours so they can be eligible for more funding, Dunne says. “Which they don’t want to do, but they’re being forced to do it.”

In a statement earlier this week, the Department of Children said the data they’re tracking suggested a record increase in early learning and childcare providers signalling their intention to expand services.

The statement also said that, with the roll-out of core funding, most services would see an increase in funding, while fewer than 1 percent of services would see no change. “No service will see a decrease in funding,” it says.

Some providers disagree with this assessment.

Geraldine Brennan, who runs ASESP After School in North Wall, says the government’s online calculator, which shows providers how much they’ll likely get under core funding, has said she will get less funding.

Byrne, of Early Childhood Ireland, the childcare-provider advocate, says that since programme support payment is being absorbed into the core funding scheme, some services may see their funding change.

“Depending on [their] setting model, the way they had things set up, they may not be directly replaced by core funding. Hence the reduction in funding for some people,” she says.

Says Brennan, of ASESP After School: “I can imagine that a lot of after schools programmes will close or will have no choice, or even reduce the childcare and let staff go,” she says.

Others say the sums work out well for them though.

Avril Lamplugh, who runs the after-school and preschool for Alexandra College, a private school in Milltown, says she has signed up for core funding, as they will get more money from it.

Dunne, of the Federation of Early Childhood Providers, says that so far, no government funding stream has accommodated how diverse childcare is. “No one service is the same as the other down the road.”

Some creches offer full-time care, but others only do part-time or wrap-around services, or after-school, she says. Which funding programmes they offer can vary too, says Dunne.

Creches are different sizes – they can be a person in their home, or a company atop a chain, she says.

Funding should have different streams for small or medium creches, she says. “It just seems to be a one-size-fits-all yet again. We’ve been saying this for years and that’s why it’s not working for providers.”

A Department of Children spokesperson, however, said that “Core funding takes very careful consideration of each provider’s individual service offer and tailors the core funding value to align with that.”

“It is not one-size-fits all and scales in line with the level of service provided,” they said.

The department has done an analysis of the impact of the new funding model on all types of service provision, they said. “There is no evidence to suggest that there will be a sustainability issue with small and medium services.”

Keeping Staff

Staff turnover in childcare has been high and rising.

Nationwide, the annual staff turnover rate in 2020/21 was 19 percent. In Dublin city, it was 21 percent, shows Pobal’s sector report.

To get core funding creches will have to pay their staff certain minimum rates of pay – which would be laid out in an expected “employment regulations order”.

Staff with higher qualifications would get more money through the scheme, too. Core funding offers what it calls “graduate premium rates” per hour for “lead educators” in a room, with a level seven degree or higher, and three years experience.

Creches are unsure whether the core funding will come through, given no employment regulation order is yet in place, says Dunne, of the Federation of Early Childhood Providers.

The Department of Children has said that if an order is not in place by 1 September, there’ll be an interim funding scheme that will run until the order comes into effect – or until 30 September.

Pamela Carter, who runs Belgrave Montessori, a private creche in Rathmines, says that if core funding can help raise wages, signing up will be worth it.

Low salaries mean not enough people want to work in childcare, she says. She advertised last year for posts. “It took me a good two months to fill the places I needed to fill.”

Carter says most of her staff have degrees, so she will be able to pay them a higher amount now. But wages must keep increasing if people are to be encouraged to get degrees in childcare, she says.

Helen Keegan who runs Buzzy Bees Creche in Clontarf Parish Centre, says that because of the limited hours she offers, she won’t get more money through core funding.

Keegan says she did a degree last year so she would be set up to get support for a higher wage through core funding.

But “The higher cap is not as much as it was previously for the ECCE scheme,” she says “It’s just a lower amount for degree-led staff.”

Anyway, Carter, from Belgrave Montessori, says she doesn’t think that just because somebody doesn’t have a degree, means they offer lower quality childcare.

“I don’t imagine going to college for four years makes you better than somebody who didn’t,” she says.

There should also be pay increases based on experience, Carter says. “If you have staff employed for four or five years, what are you going to do, are you going to get rid of them and employ staff who have a degree?”

Amanda Dunne, who runs Bizzy Bs Creche in Glasnevin, says the core funding – which she intends to sign up for – will help her increase her staff salaries by between 20 and 24 percent.

“We need to give our staff an increase in pay and value their work and education level, and this has given us the step up to be able to do that,” she says. It’s a good starting point, says Dunne, but it should keep increasing.

Other childcare providers say they’re working out how to balance the opportunity to pay staff more, with fears that they won’t be able to cover other rising costs should they agree to freeze parents’ fees.

“Insurance has gone up, my rent has gone up, electricity has gone up, and we’re not allowed to put funding up,” says Keegan, who runs Buzzy Bees Creche in Clontarf Parish Centre.

She provides three hours a day of childcare under the ECCE scheme, she says. But the fee freeze is making her unsure if she’ll sign onto core funding, she says.

“It’s the unknown,” says Keegan. “It’s kind of a double-edged sword, if I don’t sign up for the core funding, I won’t get the higher cap anyway for those kids.”

A Department of Children spokesperson said “The fee freeze is a key condition of Core Funding that will stabilise fees and ensure that subsidies under the National Childcare Scheme (NCS) result in reduced costs for parents.”

Put Off by Bureaucracy?

Some childcare providers are reluctant to try to sign on to the new core funding scheme for the same reasons they were reluctant to sign  on to other government schemes: it’s a huge hassle, they say.

Issues they cite include having to deal with piles of paperwork and the government dictating their opening hours.

Rita Mitchell, who runs Blooming Lilies preschool in Finglas, says she found using the online system difficult. “We couldn’t figure out anything.”

Although core funding will help her, she says, it shouldn’t be so difficult to sign on. “I don’t feel it should be as stressful or as time consuming as this.”

Keegan, from Buzzy Bees, says that she finds it unfair that she’s only paid for providing childcare, and not for doing bureaucracy.

“There’s a lot more paperwork. We don’t get paid when we’re doing all this paperwork,” she says.

While the €25 million of administrative staff time under the core funding is to pay childcare providers for this time, Byrne of Early Childhood Ireland, says it doesn’t cover all the work that providers do, such as observations and documentation.

Too much expectation is placed on providers to know how to use online systems, and spend a lot of time filling out online forms, each year, says Dunne of the Federation of Early Childcare Providers.

“We work with children,” she says. “I never took on my position as you know, an experienced early learning and care worker, to work in an office.”