Long waiting lists, high prices: childcare system is at breaking point

The childcare system in Ireland is reaching breaking point with waiting lists of up to 12 months in some cases. More capacity is urgently needed but, according to Childhood Services Ireland (CSI) director Darragh Whelan, measures in Budget 2022, while welcome, will not address that crucial issue.

CSI is the Ibec trade association representing childcare providers across the State. The sector looks after more than 200,000 children in 4,600 childcare services and employs almost 31,000 childcare professionals, but demand still exceeds supply.

“We did a survey of our members and 81 per cent of respondents have waiting lists and 79 per cent of them have waiting lists of longer than six months,” Whelan points out. “We also asked them when parents start putting children on waiting lists. The response was six months before birth or even earlier. That’s preposterous.

“A provider in north Dublin has told us of an Irish woman returning from abroad who is three months pregnant and asked to put the child on the list. She has a friend who is also returning from abroad who is thinking about getting pregnant and was considering putting their name on the waiting list even before conceiving.”

Building capacity must be a key priority, he contends.

“The childcare sector sits on a three-legged stool – the parents, the childcare providers, and the staff. All three must be supported or the structure becomes unstable. The Government has done something for parents, and it’s done a bit for staff but hasn’t really done much for providers. And the fee freezes announced in the budget will do nothing to incentivise capacity growth.”

The additional funding for parents through the universal subsidy will make childcare more affordable but that won’t address the capacity issue.

“Affordability won’t help if the capacity isn’t there. There is no point in giving parents more money if they are at the back of the queue. A lot of the problem with capacity comes down to the overall funding model.”

CSI has identified a number of key actions which it believes would help grow capacity in the sector. The first area for attention is the Early Childhood Care and Education (ECCE) scheme which provides early childhood care and education for children of pre-school age and over two years and eight months of age.

“It is an excellent programme which is wholly funded by the State, but the rates paid to providers haven’t changed in donkey’s years despite cost increases. If the rate was increased we might get new or expanded ECCE offerings.”

Whelan notes that, while childcare providers are charged commercial rates, ECCE providers are not. “A change to that and a move to the zero rate of VAT for childcare providers would also be helpful.”

And then there is the payment given directly to providers for administering the National Childcare Scheme.

“The providers get no benefit from running the scheme but the payment is only equivalent to one-fifth of the time required to do it. Some small providers end up working 60-70 hours a week to deal with it. The large providers have the benefit of economies of scale.

“It’s a sustainability issue. If a provider is struggling like that, they will never set up a second service or expand their existing one. It stunts the growth of smaller providers. The backbone of childcare services in Ireland is made up of people who worked in the sector and then set up on their own.

“When employees see their managers pulling their hair out because of issues like that, they are not inclined to stay in the sector and certainly not inclined to open up a new one. There is a need for a fair and equitable distribution of resources across the three legs of the stool.”

The issue of low pay in the sector is being addressed, however. “We want to see the pay and conditions of staff improved but, up until now, any cost increase for providers had to be passed on to parents and that is not sustainable.”

However, a novel solution has been arrived at whereby pay and conditions across the sector will be determined by a Joint Labour Committee (JLC) made up of employer and union representatives, while the Government will make additional funding available to the providers which must be passed on to staff. This solution avoids the situation of the Government inadvertently nationalising the sector, according to Whelan.

“The extra funding in the budget was welcome but we need action to ease the capacity issue,” he adds. “This will support the development of a sustainable sector with all the right outcomes including increased capacity, improved standards, and better learning outcomes for children. There is no point in putting additional money into other parts of the system if there is no increase in capacity.”