Majority of childcare providers unhappy with state funding, survey finds

The new funding system saw €259m and €287m pumped into the sector in 2022 and 2023 respectively. 

More than eight out of 10 childcare providers are unhappy with the Government’s core funding system for the sector, with a majority saying it has made their businesses unviable, according to a survey.

The survey, conducted amongst 810 childcare providers nationally, found that almost two-thirds of the businesses are considering leaving the system.

Core funding was first introduced in 2022 after years of dissatisfaction regarding Government inaction in terms of childcare fees and subsidies.

It saw childcare fees, which had been among the highest in Europe, cut for parents by roughly 25% from September last year.

The Government pledged to reduce fees overall by 50% in Budget 2024, however the additional fee cuts will not actually happen until September of next year.

The new funding system saw €259m and €287m pumped into the sector in 2022 and 2023 respectively. 

However, many businesses have complained that the additional administrative burden it brings, together with the freezing of fees for participating businesses at a time of hyper-inflation, have made core funding more trouble than it is worth.

The survey also found that 67% of the providers who took part believe that the new terms of core funding have rendered their businesses unviable. 

A new charted accounts system introduced by the Department of Children is expected to “exacerbate” the workload of childcare businesses, particularly the smaller ones, leading to “an overwhelming administrative burden”.

Elaine Dunne, chair of the Federation of Early Childhood Providers (FECP) which commissioned the survey, said in her opinion core funding has failed.

She said while some aspects of the system relating to operational planning are “commendable”, nevertheless “the combination of perilous underfunding and inaction on unworkable policies is decimating independent creche facilities”.

The survey comes as new figures show Cork has lost 28 creche facilities in the last two years. 

Since 2021, 16 new creche services have opened in the county, however, 44 have closed in the same period.

Some 15 providers have closed in Cork so far in 2023 to date.

The figures were provided to Cork Fianna Fáil TD Pádraig O'Sullivan by Children Minister Roderic O’Gorman, who said the closures do not necessarily imply a reduction in capacity in the sector.

“Every year it is normal for some services to close while other new services open. 

Services close for a wide variety of reasons including retirement of owners or other personal circumstances,” he said.

Meanwhile, school-age childcare services in Cork have increased in the same period with 66 providers registering since 2021 against the 11 that have closed.

The survey, conducted amongst 810 childcare providers nationally, found that almost two-thirds of the businesses are considering leaving the system.

Speaking in advance of last month’s budget, Mr O’Gorman said childcare services have come a long way as the sector was historically underinvested in “for decades”.

“We're playing catch up, but we've made really important strides over the last three years  — €400m increase, that's 60% growth in state investment. 

"I don't know any other area of state funding that has grown so much so quickly,” Mr O'Gorman said at the time.

In late September the FECP organised three days of childcare stoppages around the country, including a protest outside the gates of Leinster House which drew roughly 2,000 childcare workers from around the country.

Ms Dunne acknowledged in light of the survey’s publication that many back-bench TDs and members of the Government “have been extremely supportive and helpful” regarding the federation and its demands, adding that it is the Department of Children and core funding itself that her organisation “has an issue with”.