Childcare providers call for an end to freeze on fee increases

About €331m was allocated to core funding for this year in last year’s budget. Childcare businesses which sign up to access core funding must also commit to freezing their own prices. Picture: Dominic Lipinski/PA

A body representing childcare providers is calling for the freeze on fee hikes in the sector to be removed to enable struggling businesses can stay afloat.

Childhood Services Ireland (CSI), a branch of employers’ confederation Ibec, is also calling for increased investment in the sector up to 1% of GDP, in line with a recommendation by Unicef.

In its pre-budget submission to the Government, CSI said it wants a 35% increase in core funding or the removal of the fee freeze, or both.

The Government has pledged to reduce childcare fees by an additional 25% as part of the upcoming budget. Since its inception three years ago, core funding — which represented a vast hike in the State’s investment in childcare — has seen fees fall for parents by an initial 25% against a commitment to bring parental outlays down by 50% within two years.

About €331m was allocated to core funding for this year in last year’s budget. Childcare businesses which sign up to access core funding must also commit to freezing their own prices.

At the launch of last year’s budget however, Children’s Minister Roderic O’Gorman said that the second cut in fees was to be delayed for 12 months until this September.

While fees have been falling for parents, childcare businesses have complained that there have been no efforts to reduce those businesses’ overhead costs (particularly at a time of record inflation increases) by allowing fee increases.

In a recent update to services, the Government said that services will be allowed to apply for permission to increase fees on a limited basis from September, leading to fears that any pending drop in childcare costs for parents will be offset by a concurrent increase in fees by their providers.

In addition to its calls regarding GDP investment and fee hikes, from the point of view of parents, CSI said that it is also pushing for an increase in the subsidy rates payable under the National Childcare Scheme “to cover 70% of the cost of childcare, creating more parental choice”.

The scheme was introduced in 2019 and is the mechanism by which childcare fees have been reduced from the record highs seen up to 2021, where parents were paying close to €1,000 per month per child on average around the country.

CSI director Stephanie Roy said that if the Government is “committed to building a future for Ireland it needs to start with an investment in Ireland’s youngest citizens”.

She said that the need for “meaningful partnership” between the Government and childcare service providers has “never been more apparent”.

Regarding the call to raise investment to 1% of GDP, she said that early years are “the most critically developmental time in a child’s life, and access to high-quality early learning and care is key to long-term success and positive outcomes across multiple domains”.