Childcare costs a fortune, staff earn little. How can it be fixed?

A two-storey, semi-detached house in a newly built estate in Crumlin, in Dublin, is where the dream of running her own childcare centre became reality for Bronagh Mooney. It was a family effort, as the sister of the woman she started it with worked alongside the two of them, as did Mooney’s own mother for some years.

This Creative Kids and Co creche has been running 24 years, with some past pupils now coming back as parents with their own children. One of Mooney’s newest staff members is a young woman she used to mind and who has since grown up and completed a degree in early childhood education.

Despite that sense of continuity, the childcare landscape in which the centre operates is radically different from when it first opened.

It emerged like a lot of things in Ireland, with the State not taking responsibility, says Marian Quinn of the Association of Childhood Professionals

As another provider who started her Montessori school the same year, Susan Cleary of Rowan House in Blackrock, Co Dublin, says: “It has changed dramatically in terms of regulation and it hasn’t changed one iota in terms of your everyday interaction with children.”

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The term ‘childcare’ covers a multitude, being shorthand for the gamut of early years education and care that ranges from informal family arrangements to paid crèches and in-home childminders.

To design a world-class childcare system, you certainly wouldn’t want to start from what evolved haphazardly in this country. Centre-based care is divided roughly between 73 per cent private and 27 per cent community crèches.

“It emerged like a lot of things in Ireland, with the State not taking responsibility,” says Marian Quinn, chairwoman of the Association of Childhood Professionals. Individuals started meeting a need; belatedly the State stepped in to try and formalise what was there and now there’s “a crisis situation”.

Chronic under-investment, in the words of Early Childhood Ireland this week, means the sums don’t add up for parents or for many providers and their staff.

That’s not to say significant progress hasn’t been made, particularly with the Early Childhood Care and Education (ECCE) programme, which has been extended to two years since September and for which parents pay nothing.

But that’s primarily about education – popular reference to it as the “free pre-school years” grates with full-time working parents who are still shelling out many hundreds of euro a month because the programme covers only three hours a day for 38 weeks of the year.

High costs

Providers argue that the €69 or €82.50 (depending on staff qualification levels) that they are paid per child per week to deliver ECCE is not enough, despite a seven per cent increase this September.

One childcare worker points out that the Government pays her creche just €4.60 an hour to take a child for ECCE, that’s only 10 cent more an hour than it costs to park a car short-term in Dublin Airport (after the first hour) – “and think of all we do for the children”. However, it is bread-and-butter income on which many a centre relies.

The economic and societal imperatives for getting childcare right in this country have never been greater. On a personal level, high costs are a barrier for parents who need and/or want to go back to work and the disproportionate effect on mothers hits gender equality.

On an economic level, the State needs to grow its workforce, and there are definite economic advantages if this can be done from within the country, recruiting people who, for example, already have houses. The ESRI published research last month that showed higher childcare costs result in mothers working fewer hours in employment.

The gestating Affordable Childcare Scheme, which got off to a partial start last year with the “September measures”, is making a difference to low-income parents, giving them up to €145 a week off the cost of full-day care. But the universal maximum subsidy of €20 a week for other families has been less effective, particularly as it is estimated that, on average, €7 of that was absorbed by providers putting up their fees.

Subsidies are now being paid for 84,000 children, according to the Department of Children and Youth Affairs, but they are available only through registered providers, which rules out most childminders, nannies, au pairs and paid relatives.

And because the IT system needed to deliver the scheme through a ‘parents’ portal’ isn’t ready – November 2019 is now, it’s understood, the launch date for that – the burden of administration is a nightmare for providers. Overall, an extra €36 million has been given to providers for this, according to the department.

Running costs

Bronagh Mooney, who now runs three other Creative Kids and Co pre-schools – in Walkinstown, Stoneybatter and Basin Lane – has five staff on a minimum of 30 hours a week just doing the paper work that goes with all the regulations and subsidy schemes for the four services.

Unlike her Crumlin centre, the other three are all located in primary schools and none is offering full-day care, but rather ECCE sessions, with hours added on where required up to a half day, and after-school care.

It’s got to the stage where Mooney freely admits that sentiment rather than business sense is keeping her first centre open. That centre’s latest, completed, profit and loss account shows how, in 2016, the expenses exceeded the income by almost €2,500 – a gap that would be all the greater if some costs weren’t absorbed by her other centres.

Mooney’s annual insurance bill for Crumlin alone has increased from €655 to €930 since then, the rent has gone up again, and she had to pay €8,000 during the summer to update the fire alarm to the latest specifications required.

Mooney is proud that her Crumlin centre provides high-quality, homely care but feels that places like that are being pushed out of the sector because they are not economically viable.

“People like the small operations,” she says. “But the scale does not work at all. I know in my heart of hearts that I need to close it but I don’t want to pull that service from the community.”

Although the centre is staffed for full-day care, only about 60% of the children attend full time

She knows three other small services in Dublin 12 that closed this summer. It is estimated that between seven and nine per cent of the country’s 4,500 providers have multiple branches; some of those are big, branded chains, others are more like Mooney’s.

In Crumlin, Mooney charges €187.50 a week for full-day care, regardless of the child’s age, and her maximum capacity is 22 children across the age range: three babies, five toddlers, six two/three-year olds and eight pre-schoolers, who do the ECCE programme as part of their day.

But while the centre is staffed for full-day care – one person in each of the four age-category rooms, plus a “floater”, a cook on site and a manger doing paperwork – only about 60 per cent of the children attend full-time. Parents may be working part-time, or they are using a mixture of childcare arrangements, either out of preference or to save money.

“It is a huge financial burden on families, [but] at the same time I am trying to run a business,” says Mooney. She does not intend to raise fees, which are slightly above the national average of €174 a week but are relatively low for Dublin,. Mooney’s fees are in line with other providers in the area, where many of the parents would be working in low-paid jobs.

Quite apart from her personal attachment to the Crumlin centre and long-serving staff, she says: “I couldn’t even contemplate closing because I couldn’t afford to pay the redundancies,” she adds. “It’s just Catch 22.”

€1,357 a month

Marian Quinn is familiar with that scenario.

“We have providers on to us who really need to close but they are going, ‘where do I get the money to pay the redundancy?’.” She also knows of one provider who has had to take a second job in another sector to pay her staff’s wages.

The challenges Mooney is encountering – from rising costs such as rent, insurance, utilities and commercial rates, to the expense of complying with ever-changing regulations – are shared by childcare providers around the country. And, as for all services, her biggest outlay is staff, making up 64 per cent of her Crumlin costs in 2016.

It would be usual that for every euro a childcare centre takes in, about 63 cent of it goes just on staff costs, say Bob and Niamh Leeney, co-founders of Seas Suas, a group lobbying on behalf of early education and childcare providers.

Yet staff are still poorly paid, with the national average hourly wage across all levels being €11.70, according to Pobal’s 2016/17 profile of the sector.

Difficulty in recruiting and retaining staff is one of the four main problems in the industry, Bob says, along with the inadequate State support, excessive regulation and rising costs.

The Leeneys have been in the business 28 years and operate in a very different part of Dublin from Bronagh Mooney. They run the Narnia Nursery School that has two buildings, one in Dundrum and the other in Kilmacud.

There are 29 staff, including drivers and two cooks. Some 150 families use their services but in many different combinations of hours and days because the nursery offers parents flexibility as a matter of principle.

As a result, there are about 35 different prices, eg for one day a week for six hours; for five mornings for five hours; for five full days etc

With Government schemes to administer, it makes this tailored approach very difficult. They have been told they’re “mad”, says Niamh, and that they should offer only full-time places. However, she believes children shouldn’t be there 10 hours a day every day if they don’t need to be. Bob points out that greater workplace flexibility means parents need flexibility in their childcare too.

Their fees have always been among the highest in Dublin. For example, five full days a week for one pre-schooler at Narnia costs €1,169 per month; for 10 months of the year that fee is reduced to €923 through the grant the nursery receives for delivering ECCE.

The cost of a full-time baby place is €1,357 a month, and the room is practically booked up until April 2020. But that’s because they only have six places and have no interest in increasing that.

“For us it is a real vocation. It is not about getting them in,” says Niamh.

The sector will live and die by the quality of the staff

Acknowledging their fees are at the top end of the scale, and that they have increased them every year for the past four years, Bob thinks they probably pay their staff a bit more than other providers, but it is not a topic that is openly discussed.

Like most providers they say they would like to pay more. The nearly €20,000 that goes on commercial rates for the two premises could be used for a pay rise of between two and three per cent if early-years centres were deemed exempt, he points out,

Rates are a very sore subject within the sector as there is so much variation in how these are applied around the country, with some paying hefty fees and others paying none. Officially, if centres are running only the ECCE scheme, they are exempt, as are those operating on a not-for-profit basis.

Low pay

The Minister for Children and Youth Affairs, Katherine Zappone, has urged her Government colleagues to agree to making all early-years facilities exempt, pointing out that private fee-paying schools don't have to pay rates.

If early years education and care is to attract high-quality staff, it all comes down to money, says Bob Leeney. The burden for funding this should not fall on parents, and it's where State investment needs to be focused.

The largest providers’ representative body, Early Childhood Ireland (ECI), echoes that. “If the Minister walked in the door and said ‘I can do one thing in this Budget, what should it be?’, all in Early Childhood Ireland would say ‘you have to improve terms and conditions for staff’,” says ECI’s director of policy and advocacy, Frances Byrne.

“You have to do that because it’s good for babies and children – quality and consistency of relationships is what is good for children.”

It’s also the key to sustainability, she says. “The sector will live and die by the quality of the staff.”

The job itself is much bigger than anyone would expect

It’s not often you hear a Government Minister calling on workers to join a trade union but Zappone has repeatedly said that if she were a childcare worker, that’s what she would do. Despite heading the department that is leading the way in childcare investment and reforms, she can’t dictate what staff should be paid in private businesses.

Low pay and precarious employment conditions are driving workers out of the sector, with annual staff turnover running at more than 28 per cent. The State’s current high rate of employment is not only fuelling the need for childcare but it also means early years workers can find better job options elsewhere.

The State has laudably incentivised further professional training through higher ECCE capitation rates for centres hiring room leaders with at least a level 7 qualification and three years’ experience. Yet this has, it seems, had the consequence of empowering some graduates to realise they’re worth more than these jobs offer. They can move, for instance, into public service jobs such as special needs assistants, that have a pay scale and a pension.

‘We’re cooks, cleaners, mothers’

“As a sector we are not taken seriously – we are taken as glorified babysitters,” says Eva Lawes (28), who works at a private creche, Páistí Le chéile, in Donnycarney community centre. “Yet we’re expected to be everything: we’re cooks, we’re cleaners, we’re teachers, we’re mothers when their mothers aren’t here, we’re fathers when their fathers aren’t here, we’re therapists when there is something going on at home.

“The job itself is much bigger than anyone would expect but I was paid more working unqualified in a shop than I was in childcare,” says Lawes. She has a Montessori certificate and spent about €6,000 on obtaining a level 6 qualification in early childhood education, after which her hourly pay increased from €10 to €11.

“I am not paid much more now,” she says, having started in Donnycarney last March at what is a Montessori school in the morning and provides after-school care in the afternoon. She does 10-hour shifts from 8am to 6pm four days a week.

“My boss is ticking over, she is paying as much as she can although she would like to pay me more. The funding is just not there.”

Lawes has a partner “but at the moment there is no way I could afford to have children”. She loves the job and reckons she’s good at it, so wonders why she should have to work at something else to be paid properly.

“If everyone starts leaving the sector, who is going to look after the children? And it affects every other working sector. If we close down tomorrow, there’s 20 parents standing outside not able to go to work in the morning.

“I am holding on for change,” she adds. “That’s why I joined Siptu.”

The union has set up a “Big Start” campaign to lobby for increased State investment in childcare.

‘Lucky ones’

Deborah Reynolds (35) is another who wonders about the future because the €300 a week – €12 an hour – she earns as a play leader at Kilkerrin Community Play School in north-east Co Galway would not enable her to move out of her family home and live independently.

However, she considers herself “one of the lucky ones” because she is paid for one non-contact hour every day; the children are there from 9am to 1pm but she doesn’t finish until 2pm. Nationally, about 50 per cent of staff in the early years sector work part-time, whether they want to or not. She is one who would love to have more hours and has taken a Saturday job as a receptionist to boost her income.

Reynolds has worked in the community play school for the past 12 years, during which time she studied part-time over two-and-a-half years for a level 7 degree in early years care and education at the Athlone Institute of Technology. It cost her about €7,000 but she didn’t get any pay rise on completion.

I worked in early years for 20 years, not getting paid for summer and using the credit card to try to make ends meet

“It’s just not possible,” she says, explaining she would hate the idea that, if any extra money was allocated to her, it would do the not-for-profit play school out of something it needed.

Like most “sessional” centres, the staff work around the 38 weeks of the ECCE scheme. Although that can be stretched to 44 weeks of pay, once bank holidays and annual leave are included, it still leaves Reynolds having to draw the dole from the end of June to the end of August, for which she gets €193 a week.

“I was that person,” says Marian Quinn. “I worked in early years for 20 years, not getting paid for summer and using the credit card to try to make ends meet.”

At age 39, she was struggling to pay substantial bills, had no pension and realised she could not continue like that. She did further qualifications and was able to get a lecturing job in Cork IT on an early years programme. While she enjoys the third-level students, her preference would to be back among pre-schoolers.

“It is symptomatic of where our priorities are – across the education continuum there are certain areas that are valued and other areas that are completely devalued,” she says.

Vital infrastructure

Nobody could accuse the current Minister of Children and Youth Affairs of undervaluing the importance of early years care and education but parents and providers alike will be waiting on Budget 2019 this Wednesday to see how successful she has been in persuading Government colleagues to accelerate investment.

At the time of writing, when departmental budget negotiations are ongoing, sources indicate that even maintaining the rate of increase in investment that has been achieved over the last two budgets is a struggle. However, officials in her department, where 70 staff now work in a dedicated early years unit, do hear childcare beginning to be talked about as vital infrastructure – in the same breath as housing, roads, broadband etc

There has been an 84 per cent increase in investment in early years since 2015. But it still represents between 0.1 and 0.2 per cent of our gross domestic product (GDP) a long way short of the EU average of 0.8 and Unicef’s recommended 1 per cent of GDP.

The department is still awaiting results of an independent review of the cost of quality childcare, which, along with a 10-year, cross-departmental strategy on all aspects of the lives of children aged 0-5 that is to be launched on November 19th, will shape long-term planning.

Meanwhile, regulating the country’s 35,000 childminders and moving closer to funding parental leave that enables a mother or father to stay at home for up to the first year of a baby’s life are works in progress.

For Budget 2019, it is understood Zappone has argued that to raise the eligibility threshold for targeted subsidies, from the current level of a net family income of €47,000, would be better use of increased investment than an add-on to the universal pay-outs.

A source close to her explains that she is solely focused on making investements in childcare that will deliver results – tax credits are not direct investment into quality childcare. Nor are granny grants.