Childcare: State is doing more than ever to reduce costs — but parents aren't likely to be grateful

Government is putting a total of €1.5bn into childcare to reduce maximum fees, freeze current rates, and increase wages for staff

There will be little celebration from parents, whose key concern is the number on the invoice that drops every month. Picture: iStock

Fact and perception can be at odds.

Tell someone who has just been robbed that crime rates are falling, and you’re likely to leave with a flea in your ear.

One of the harder things about governing is that perception can be a more potent force than truth in shaping the national psyche.

That is why members of the Government often feel they do not get enough credit for their work. And there is some validity to that.

For all the problems in Ireland, the State has never been doing or spending more. And yet, those problems persist.

Some are becoming worse or even intractable, so it’s easy to see why the public isn’t falling to its knees in thanks.

Nowhere is this more illustrated than in the childcare sector.

Yesterday, children's minister Norma Foley announced record core funding in the sector. From September — year five of a funding scheme — €480m will go to 4,600 providers in the State’s core funding scheme, which “supports providers to meet their staffing and general operating costs, in return for maintaining a fee freeze for parents”.

Ms Foley said State funding in the early learning and childcare sector has more than doubled from €730m in 2022 to €1.524bn in 2026.

This is massive money and obviously welcome.

So, why doesn’t it feel like it?

Start with the obvious: Childcare costs. Organisation for Economic Co-operation and Development (OECD) data suggests that a two-worker couple will spend around 15% of their disposable income on childcare, the fourth-highest in Europe.

In some areas of Dublin, weekly costs before any subsidy is received can be €190 a week on average for early years childcare, according to Pobal, but can be as high as €346 per week.

Even accounting for increases to the national childcare scheme subsidy in recent years, costs remain the equivalent of a second mortgage and can even exceed that.

On the morning that Ms Foley was preparing to make her announcement, a survey from the Cork Chamber showed that 36% of Cork businesses said childcare challenges directly resulted in employees leaving or else declining roles, with 57% saying that shortcomings in childcare had a “moderate” or “significant” impact on their workforce.

Businesses reported an increased demand for flexible working arrangements as a result of childcare challenges, with 69% saying they would consider supporting childcare through corporate creches or tax-incentivised partnerships with providers if appropriate government incentives were introduced.

Anything else?

Early years providers call for reform

At an Oireachtas committee last month, representatives of the industry said that core funding was “no longer sustainable”, and urgent reform was needed to support early years services and reduce waiting lists for childcare. 

The early years providers also said that urgent action was needed to be taken to address challenges with recruitment and retention of staff.

In yesterday’s announcement, Ms Foley said the increased funding includes up to €45m that is ring-fenced to support increases in the minimum rates of pay for early years educators and school-age childcare practitioners, rates of which will be discussed at the joint labour committee.

So, €1.5bn will, overall, go in to a sector to reduce max fees, freeze current rates, and increase wages for staff. And 12% of providers will have to reduce at least one fee.

And yet, there will be little celebration from parents, whose key concern is the number on the invoice that drops every month.

Perception and reality are hard to untangle, especially when it’s difficult to tell which is which.

• Paul Hosford, Deputy Political Editor