State childcare spend to hit €1bn annually, says Minister

State childcare spending will rise to €1 billion annually within six years, leading to lower fees and higher staff wages, Minister for Children Roderic O’Gorman has said.

The Minister of State announced “transformational” reforms on Tuesday. And he said the sector would change – from being predominantly privately run, to a hybrid publicly funded and managed model.

The plans were cleared by Cabinet on Tuesday and propose up-skilling of childcare workers and educators that would result in a graduate-led workforce by 2028.

Average fees for full-time childcare in the State now run to €186.12 per week. Though he did not say when fees would begin to fall, Mr O’Gorman said the new deal will first mean capped fees as well as increasing wages for staff. Some parents might see reductions in the coming year, but for most it would be possible for that to happen in subsequent years when State funding has risen.

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“The sector has pay conditions that do not reflect the importance of the work to children, to families and to society. The consequence of this is high staff turnover and an undermining of the children’s experiences,” he said.

Small firms

The State must play a bigger role in childcare, he said, adding that 69 per cent existing providers are privately owned.

“I think there is going to continue to be a role for private providers; they do a fantastic job. Many of them are small businesses, but we believe we can work in partnership with them, providing a significant increase in the amount of funding – particularly so they can pay their staff appropriate wages,” said Mr O’Gorman.

“Then we can have those public management elements like the cap on fees, like ensuring that all providers are providing the National Childcare Scheme so parents can get that benefit. It’s a hybrid model, but it’s one that is very different to the one we’ve operated over the last 10 years which is primarily an entirely private sector,” he added.

An employment regulation order will be published to improve pay and conditions. Extra State spending under the National Childcare Scheme was previously not passed on to parents, but future funding will mean fees fall.

Emphasising that this is “the start of a process” to cut fees, he pledged years of extra State investment “for early learning and care and school-aged childcare . . . [to] develop a partnership with the sector for the public good”.

The second analysis, Nurturing Skills: The Workforce Plan for Early Learning and Care and School-Age Childcare, 2022-2028, plans higher qualifications for childcare staff, with most to be graduates by 2028.

Some 45,000 people work in the sector but staff retention is a problem because of pay and conditions.

Saying the report does not tackle “sky-high fees”, Sinn Féin’s Kathleen Funchion said parents “don’t want to compare fees, they want affordable childcare and they want it now”.