With 1175 registered childcare providers in Dublin, Childhood Services Ireland (CSI) says Budget 2027 must support services’ ability to retain staff and provide quality care alongside measures to reduce parents’ bills.
In its pre-budget submission, the Ibec group representing childcare providers says services operating under historically low fee limits are being placed at a financial disadvantage to higher-charging operators, creating a “fundamentally uneven playing field”.
Restricted revenue is limiting their ability to pay and retain staff, invest in care and meet rising operating costs – putting the availability and quality of childcare at risk for families.
“Parent affordability must be protected through increased National Childcare Scheme subsidies, rather than by imposing further restrictions on provider revenue,” said Stephanie Roy, Director of Childhood Services Ireland commenting on its pre-budget submission.
“Services operating under historically low fee limits are at a distinct disadvantage compared to operators with higher baseline fees and greater financial flexibility.
“By restricting revenue, a provider’s capacity to invest in their business, support their staff, and continuously enhance the quality of their care is severely limited.”
CSI says “while progress has been made, Ireland’s current investment of €1.48 billion falls short of the €3.34 billion needed.”
It says that without reform, services will struggle to maintain staffing levels and create additional places as demand grows.
“Core Funding must be urgently reformed to reflect the actual staffing realities of delivering high-quality childcare.”
“Lower parental fees without adequate funding could deepen capacity problems.”
It proposes a number of measures as part of a wider four-year programme of increased investment in childcare to bring it in line with international benchmarks.
These include a halt to further fee-cap reductions and higher allowable fees for services constrained by historically low rates, alongside increased National Childcare Scheme subsidies to reduce parents’ bills; a 20 per cent increase in Core Funding base rates for 2027–2028, €150 million ring-fenced for wages and dedicated support for ancillary and administrative staff.
It also wants a full review of the funding model to reflect the operating costs and needs of services of all sizes across rural and urban areas.
Tigers Childcare has 21 services across Dublin. Many of its services have operated under the fee freeze since 2022, with fees held at 2019 levels.
During that time, it has received approval only once to raise fees at some services, with those increases limited to the threshold permitted under the fee increase application process.
With fees making up the majority of income it said its operating margins have been squeezed over that period as wages, rent, insurance, energy, food, maintenance and other costs have increased.
Karen Clince, CEO of Tigers Childcare (pictured above) said that fee restrictions made it increasingly difficult to compete for staff with newer services operating from higher fee baselines.
“We are competing for the same educators, but we cannot always match the pay rates being offered by newer providers,” Ms Clince said.
“Those services are not carrying the same historical fee restrictions, so they have more flexibility to respond to the labour market. We are being asked to retain experienced staff while operating with margins that have become too tight to compete.”
The provider warned that the issue was not simply about profitability, but about the ability to sustain staffing levels and maintain quality.
“Our fees have been frozen, but our costs have not. We are now trying to deliver the same level of care with far less financial room to operate,” said Ms Clince.
“Our size has helped us absorb some of that pressure. Operating 37 services gives us economies of scale, but that only goes so far. Smaller providers may not have the same efficiencies.
“We want to pay people properly and keep investing in the service, but there is a limit to what can be absorbed when revenue is restricted year after year.”