Childcare in Crisis

7th June 2023

Posted In: Be In The Frame

One of the country’s largest childcare providers warns of an imminent crisis in the childcare sector as mounting staff costs and ongoing shortages push providers to the brink of closure.

Founder and CEO of Dublin-headquartered Tigers Childcare, Karen Clince, says that the cost of running a childcare centre has become increasingly challenging for many providers, primarily driven by wage inflation as they battle to attract and retain qualified staff.

Despite the government’s introduction of a new strand of funding last September to support the sector, she says many settings are at risk of shutting down.

Last week Minister Roderic O’Gorman announced a €28 million funding increase for year two starting in September, bringing the total budget to €287 million. However, Karen argues that the increase falls woefully short of addressing the soaring costs to run a service.

With fees frozen, she is calling for urgent action to ensure adequate provisions are made to prevent the collapse of the sector.

“I have worked in the sector for over 21 years. While I have been involved in numerous changes I have never experienced anything like the financial pressures and the staffing crisis we have faced in the last 12 months,” says Karen, who also serves as the chair of the Fingal Childcare Committee.

“The cost of running a childcare facility is at an all-time high, not only due to massive inflation but also ever-escalating wages, which account for 70% of our costs.

“Wages are rising due to increased competition to attract and retain qualified staff, yet under the scheme we are precluded from increasing fees from pre-Covid levels to meet these costs.

“While the government took a step in the right direction last year by implementing new minimum hourly rates for workers, there remains a huge discrepancy between the funding provided and the actual cost of employing high-quality staff.

“If the government does not act fast to take a proper look at the situation on the ground and commit to fully understanding what is needed to help the sector, hundreds of settings will close.”

Last September a much-welcome historic new pay agreement for childcare workers came into effect, with the majority of the new sector funding from the State allocated to enable providers to adopt the mandated pay scales.

However, due to a high number of professionals leaving the sector, increased competition for hiring has resulted in wages surpassing the funding’s coverage.

“In order to keep services open and attract good people we have to respond to wage demands as they stand today. The data used to determine the funding allocation in year one of the programme is no longer relevant as the market has moved on and the recently announced funding package for year two is based on old data,” said Karen.

She says that the government is failing to properly engage with the sector to find a solution and is urging Minister O’Gorman to meet with key stakeholders to try to comprehend the gravity of the situation and work collaboratively to find solutions.

“Providers can’t continue to prop the sector up and effectively subsidise the provision of childcare services because the government is not willing to engage with us to understand the challenges we face on the ground today,” stressed Karen.

“It’s crucial that we work together now to address these hurdles before they spiral out of control. Without immediate engagement and intervention, the viability of the childcare sector hangs precariously in the balance.”

Tigers Childcare operates 19 centres providing care for over 2,100 children and employing 300 people making it one of the largest in Ireland.