Childcare providers have warned that prices here could increase by 30 to 40 per cent for parents if there is no intervention from Government on the core funding model. In a joint statement, the providers said this was due to “unsustainable rising costs and chronic underfunding of the sector”.
The statement was issued by the Association of Childhood Professionals, Childhood Services Ireland, Ibec, the Federation of Early Childhood Providers, and Seas Suas, which together represent 80 per cent of childcare providers in Ireland.
“We’ve gone past crisis point,” said Federation of Early Childhood Providers chairwoman Elaine Dunne.
One of the organisations reported results from a recent survey showing that 40-50 per cent of their membership would be withdrawing from core funding in September, while another indicated that 75 per cent were now reviewing their participation in the scheme.
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Core funding is a State grant for the childcare industry to improve affordability and support sustainability in the sector. To qualify for it, childcare services agreed to freeze their fees in September 2021.
The providers have called on the Coalition to include them in a redesign of the scheme and have urged several changes to how the funding model operates.
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The statement said all providers should be allowed to increase their fees by €33.30, with further support to be negotiated for those that are stuck in historical fee freezes. Moreover, the Early Childhood Care and Education (ECCE) capitation rate should increase to €120 for the 2024-2025 year. It now stands at €69 per child.
The grant comprises €4.60 per child per hour for three hours each day over a five-day week. The spokesman for Children Services Ireland said “€4.60 is the current contribution to run an ECCE room and that is simply not sustainable”.
“The way core funding has been allocated has left us running at a loss,” said Ms Dunne. Many childcare businesses are still charging 2017 rates because there was no annual increase in childcare fees in the years before the pandemic.
“Meaningful conversations are the biggest thing here,” she said. “What’s been forgotten about is the children.”
The Department of Children said that childcare services with fees “below a certain level will be able to apply to increase their fees up to an approved level”.
Investment has been increased by 28 per cent, rising to €33 million in core funding for September 2024 to August 2025, said a department spokesman. There is more than €1.1 billion of public money invested in childcare, it added.
“While the fee freeze under core funding will remain in place for a majority of providers in return for this significant and increased level of investment, the department has responded to feedback from the sector and introduced a new fee increase assessment and approval process,” added the department.
A spokesman for Childhood Services Ireland said the Irish investment in childcare was far behind the Unicef recommendation of 1 per cent of gross domestic product.
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