Only nine children were using €1m VEC creche

A €1m VEC creche that was supposed to facilitate a five-fold increase in affordable places is losing money and catering for the same number of preschool children than when it was based in a smaller unit next door.

The new creche was opened by County Cork VEC (CCVEC) in 2010 alongside the Youthreach facility in Mallow.

However, CCVEC did not have enough money to fund the entire budget and its attempt to source alternative support from Mallow Credit Union is the subject of a Department of Education inquiry.

Internally CCVEC has been flagging concerns about the financial difficulties facing the creche since it opened. This was linked with worries for losses at similar centres in Ballincollig and Fermoy.

In Mallow it had hoped to attract 50 children each morning and open all year round. More than 60% were supposed to be pre-school.

Along with the €44,000 it calculated it would earn from childcare grants, it predicted the extra private demand would bring in €296,000 in fees by the third year.

This would have transformed the service. At the time the €1m grant was applied for from Pobal, the Youthreach creche in the existing Ballyellis building catered for 10 children and had two staff.

When HSE inspectors called to visit the facility in February of this year there were nine children and two workers. It is not clear if this figure fluctuates after school or on different days.

Five HSE regulations were found to have been breached. This was in spite of it being a condition of its Pobal funding that it satisfies the regulations.

In terms of facilities it had failed to provide an outdoor play area. A playground was included in the planning application and a tarmac area is sectioned off adjacent to the creche.

However, at the HSE’s insistence, this playground had to be fenced off and secured before it was used.

It was then included as a condition of its planning permission that 9sq m of outdoor play areas would be provided for each child and this should be guarded by a 2m wall. This has not been done.

Despite inspectors’ concerns in each of the last three years, this area is not fenced off and so is not available to the children.

On the day, the children ranged in age from eight months to two years. The ambition had been to serve children up to the age of six.

The funding for the project has provoked controversy.

Before it started building the centre, CCVEC knew it would not have enough money to finish the complex. It estimated that it would need another €200,000 to complete the project but it was turned down for a top-up grant by Pobal.

It decided to return to the same source of funding that twice allowed it develop facilities in Ballyellis when it had been denied direct departmental support.

This meant asking Mallow Credit Union for the €200,000. The credit union was a close partner and was represented on the board of the Youthreach centre.

Instead of a straightforward loan, the credit union offered the funding in exchange for a third lease that would run for 20 years, with annual installments of €21,500.

The county committee did not have permission from the department to sign the lease, similar to two other times CCVEC got the credit union to finance its plans in Mallow.

It did not tell the department about the agreement for another four years, when auditors had already raised a flag. This is now the subject of an inquiry.

The then chairman of the committee, Mallow councillor Noel O’Connor, signed the 2008 agreement at the behest of the committee and has defended its actions as being in the best interests of students.

The potential for further difficulty meant CCVEC decided not to draw down the loan and the 20-year lease was swapped for another deal to run until 2018.

Today there are no available outdoor play facilities or soft flooring in the mixed area. This breached the childcare regulations.

CCVEC has not responded to queries.

The rearrangement of CCVEC’s childcare facilities, to cope with financial difficulties after the Mallow facility opened, has already caused controversy.

The childcare centre in Fermoy was closed, despite catering for 24 children, and its staff told they were being reallocated to Mallow.

The women who worked in Fermoy refused to move and staged a sit-in last year until a compromise was reached.

At a CCVEC monthly meeting in February, acting chief executive Joan Russel said they were going to explore the possibility of looking for a private sector company to come in and run the centre.

However, if CCVEC closes the loss-making facility at any stage in the next 17 years, it will have to repay the €1m grant it got from Pobal.