New childcare funding system has failed, says providers’ group

The new system introduced last year for the funding of childcare has failed providers and families and has led many services to close, the Federation of Early Childhood Providers has said.

The federation, which represents 1,700 childcare providers around the country, will withdraw services for three days next week in protest at the level of funding.

“The reason we’re doing that is because funding has made our businesses non-viable. A lot of us, of the small and medium services, we are tied into a fee freeze dating back to 2017,” Elaine Dunne, chairwoman of the federation, told RTÉ Radio’s Morning Ireland.

“The new system that was brought in last year has failed many of us. There’s many providers out there struggling to keep their services open. You can see the closures that have happened this year alone. And there’s a lot of providers saying if something doesn’t give, we’re just going to close the doors between now and next June,” she said.

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“That’s not okay. The more services that are closing, the less facilities are there for children to come into and for parents to go to work.”

Ms Dunne had previously said the action is necessary because of ongoing closures in the sector due to non-viability because of current levels of Government support, and a fees freeze required of the more than 90 per cent of providers participating in the scheme.

The Department of Children has rejected the numbers she has cited on Thursday and said the latest figures, to the end of August, showed the closure of 38 Early Learning and Care (ELC) services, a figure it said represented a five-year low.

Similar protest had been planned for late last year but was called off for discussions with the Government, but nothing had changed since then, said Ms Dunne.

“Nothing changed from that discussion. Nothing at all. We got nothing. So this time we’ve said we won’t be calling off these three-day closures at all because we’ve heard nothing from Minister O’Gorman. He has not reached out to try and negotiate some kind of a deal. That’s quite concerning.”

The federation has been seeking a breakdown of the funding allocated to their sector. “Because I can tell you now it’s not coming to us on the ground. If you look at the rise in funding this year alone, we’re getting three cents an hour per child, and yet we’re expected to keep paying all of our bills and everything’s going up and up and up all the time, and we’re struggling on the ground,” she said.

Ms Dunne pointed out that between 2020 and 2023 inflation had risen by 16.9 per cent and during that same time frame they had received an increase of only 6 per cent in funding. “It doesn’t add up and you’ve still got a fee freeze dating back to 2017.”

Parents around the country had expressed their support for the position taken by the federation, said Ms Dunne.

“We’ve always kept our parents and every service in the loop. So they’ve always known that nothing has been given to us. They’ve always known that there’s a problem on the ground. The providers have kept them informed at all times.

“We issued a letter seven or eight weeks ago to all of the parents, and there is a full understanding of why we’re doing these closures. Of course, it’s an inconvenience, like a lot of these parents have to take parental leave for two, three days, but they’re also coming into town to support us on the day.”

In 2022, the State increased investment in early childhood care and education with a €221 million Core Funding scheme, representing an additional €172 million in spending by the Government for the next programme year.

Core funding is payments linked to the capacity of early learning and care centres, with bonuses for degree-level qualifications among staff. It is intended to support not only sustainability and quality but also enhance the public management of a predominantly private sector.