Childcare sector facing closures and staff exits as funding delays expected

A local childcare expert has warned that further service closures and staff departures could be on the cards if there are delays to the delivery of a funding scheme agreed on last December.

Karen Clince, founder of Tigers Childcare and chair of the Fingal Childcare Committee, said the proposed “Interim Funding” scheme “goes nowhere near plugging the gap” needed to pay for increased staff costs as well as price hikes in utilities, maintenance, and administration.

The Interim Funding scheme has been proposed as a stop-gap solution for the “Core Funding” scheme which is set to be delayed from its September 1 delivery date.

Core Funding, a new strand of funding introduced in last year’s Budget , will see €221 million invested by the State into early learning and childcare.

It is contingent upon Employment Regulation Orders (EROs) being in effect, setting minimum rates of pay for all roles across the sector.

However, childcare providers have recently been informed by the Department of Children that ‘it is not certain’ that EROs will be in place by September 1 and that an Interim Funding scheme will operate from then until such time as the EROs comes into effect.

Clince, who is a former teacher at St. Vincent’s C.B.S. in Glasnevin says that such delays to the funding stream could push a sector already “on its knees” further into crisis.

“Childcare providers across Ireland were already hiring staff at the improved rates of pay, based on the new Core funding kicking in from September 1,” she said.

“With Interim Funding amounting to approximately half of the expected Core Funding this will put a lot of providers under pressure, with many potentially being forced to let colleagues go or close rooms in order to protect their business.

“Some may even have to cease business altogether,” Clince says.

“We already face serious challenges attracting and retaining staff and this further exacerbates an already critical situation.

“Even if only delayed until the end of September, a month is a very long time in the childcare business.
“We also have had to tell our staff that they won’t receive the expected wage increase from September, which has left many disheartened.

“And with new recruits demanding rates according to the newly recommended pay scales, we have to pause recruitment until we can have the required funding to pay these new rates.”

Interim Funding calculations are based on information available from the 2021/2022 programme year, and so do not take into account the recent hikes in costs to childcare businesses.

“Our own direct costs have increased 23 percent from 2021 due to increases in wage rates and hours while other overheads have increased 20 percent from increased administration, utilities and recruitment costs,” Clince says

“Under the Core Funding, we are unable to increase our prices to cover these increasing costs. Our last price increase was in September 2019,” she said.

“The government needs to take seriously the funding challenges we now face to ensure childcare services can remain open in the coming weeks and increase the amount allocated through the Interim Funding until Core Funding is in place.

“We also need more certainty into how long it will take for the EROs to be approved and put in place so that the Core Funding can be rolled out.

“Without certainty, those working in the sector will either be forced to leave due to downsizing and closures, or they will leave of their own accord due to dissatisfaction.”

Tigers Childcare was founded by Clince in 2003 and caters to around 1,200 children in various centres around the county.