Providing childcare for under-3s ‘financially unviable’

A study of daycare providers has found it is financially unviable to provide childcare for under-3s, as the free preschool scheme is more “predictable”, offering a guaranteed income with lower staff costs.

After-school care also provides a far better return than providing under-3 care.

Daycare providers are seeking to have all childcare services exempt from commercial rates. Currently, rates exemption applies only to free preschool or the early childhood (ECCE) year. Some private creches pay annual rates of up to €24,000.

They also want Children’s Minister Katherine Zappone’s controversial Single Affordable Childcare Scheme (SACS) to run year-round, have varying capitation rates based on geography, and pay staff for administration and class planning. It says €20m needs to be invested in SACS in the budget and increased year on year.

The Early Childhood Ireland research found an average private creche “runs on a break-even basis” with any profits quickly reinvested in replacing equipment and adhering to new regulations.

Salaries and wages make up 80% of costs, yet most of the staff are earning below the living wage of €11.50/hr and have difficulties raising finance to buy a home. As the ECCE only runs for 38 weeks, most staff are only employed for that period.

The research also found many owners have cut their own salaries to make ends meet, rather than hike fees. Owners/managers are paid an average of €26,835 for working mor than 50 hours weekly, managing nine to 12 staff and 50 to 60 children.

Early Childhood Ireland director Theresa Heaney said the childcare sector is “built upon low wages and part-time contracts”, yet it is one of the most expensive in Europe.

“Childcare is unaffordable for many parents, with many families struggling to cope,” she said. “In Ireland the average cost of childcare accounts for a massive 35% of household income, whereas across the EU and OECD childcare costs between 10%-13% of a family’s income.

“Yet, the childcare sector in Ireland is in real crisis in terms of recruiting staff and keeping them and we’re seeing this as a direct result of low pay, low morale and an ever higher administrative burden.

“This all runs counter to the ongoing professionalisation of the sector which is vital to ensure quality.”

Counting cost

• Average cost of childcare here is 35% of household income, compared to 10%-13% in Europe/OECD.
• In a town or city, average full-time creche fee for a baby is €185.42 a week. Full-time daycare for toddlers is €175.57. Out of school care is €87.07 per week.
• The hourly wage of an early-years creche worker is €10.92. A degree-holding creche leader or room supervisor earns €11.41.
• Parents need the budget to introduce a childcare subsidy for babies and toddlers as this type of childcare is difficult to find, according to creche owners.