Mayo childcare services may close as providers reject new core funding model

Thousands of parents across Ireland could face an autumn without childcare, as Early Childcare and Education (ECCE) service providers face closure as a result of a new government proposal for core funding supports due to come into play on September 1 next.

The Federation of Early Childcare Providers (FECP) said today the €221 million Core Funding Programme (CFP) announced three weeks ago by Minister for Children, Equality, Diversity Integration and Youth, Roderic O’Gorman, is seriously flawed and threatens service provision.

Providers are asking for petitions, letters to TDS, and protests to be put in place so their voices can get heard

Up to 70% of FECP members surveyed reported that, having examined the viability of the core funding allocation to their service, they were not happy they could sustain their business.

A further eight in ten of the 808 childcare providers questioned said that, despite the government introducing new sick pay legislation this week, they would be unable to meet any demand for sick pay, while at the same time providing the necessary relief staff to meet required ratios of carers to children.

With over one third of providers committed to rejecting the new core funding model and just 12% saying they will sign-up, more childcare headaches for parents are likely on the horizon.

Protest closures, lobbying local TDs and petitions are planned by the sector across the country.

The fact that ECCE capitation, the government subsidy for early-learning support, has increased by only 7% since 2010, and has never been index-linked, is one cause of contention.

So too, the group is unhappy with the demand that childcare services sign-up to an Employment Regulation Order (ERO) for minimum pay and conditions, and a separate clause that essentially amounts to fees price-fixing, its organisers say.

FECP chairperson Elaine Dunne claims that, with price inflation going up to six per cent, industry costs have risen in the last year by almost the same level as the total capitation increase in the last 12 years.

“The minister’s department is using inflation assumptions dating from September last, which forecast a rate of 2.1 per cent this year.

“Childcare providers are facing increasing overheads due to additional regulatory requirements, wage increases, insurance hikes and the fallout from Covid closures and the expensive operational measures required."

In a press release subsequently issued, Minister O’Gorman has also admitted that only €172 million of the promised €221 million fund is actually ‘new investment’.

FECP members claim they cannot sign-up to the new proposed funding and that ECCE base rates must increase to at least €100 euro a week to ensure sustainability.

If government want an ERO they must ensure services can afford to pay better wages, Elaine Dunne insists.

“Last September the HSE wrote-off €374 million expenditure on obsolete PPE equipment.

"Now Minister O’Gorman proposes spending less than half of that – just €172 million – on protecting Ireland’s youngest citizens, their families, and the childcare industry.”

While she welcomed some of the proposals, Ms. Dunne said that government had ‘railroaded the package through, and caused panic and fear of childcare closures’.

“We really wanted to welcome this new package, but weren’t given the chance to point out its flaws, in particular outdated assumptions on inflation, and an unrealistic view of operating costs.

"Plus, the failure to balance recognition of the role of university education in our industry with the equal importance of experience."

Payment of a ‘graduate’ premium to childcare services with graduates in lead educator and management positions fails to recognise the make-up of most childcare provision, the group maintains, and discriminates against workers with vast experience and training, but no third level qualification.

The FECP chairperson also points to a key condition of the core funding proposal, a freeze in parental fees, which, she says, amounts to price fixing and anti-competitive behaviour that will drive providers out of the industry.

“The irony of the Taoiseach recently condemning price-fixing in fuel supply, is not lost on us.

"Now his government wants to fix our fees and set our wage costs and conditions, with no consideration of rapidly rising childcare overheads, like energy and insurance.”

The FECP believe that the New Core Funding Model undervalues both ECCE providers and children, and is formally calling on Minister O’Gorman to engage in talks immediately.

“ECCE providers who will not benefit from the Core Funding Model are unlikely to sign new contracts, and this could leave many parents without a place for their child. Is this really the outcome government wants?”, Ms. Dunne said, adding that a workable solution can be found through a genuine partnership approach.

In March last year the government’s ‘Our Rural Future’ document committed to services in rural areas, including better childcare.

The policy announced last week does nothing to support this aim, FECP members say, in that it favours large profit-making urban providers, with high graduate staff ratios, and penalises the smaller community-friendly providers whose staff are nonetheless highly experienced.

Ms. Dunne said the FECP is organising to reject the new Core Funding model in its #I’mNotSigning campaign, and would be actively engaging with local TDs, via its strong network of providers, in the build-up to the next election