Parents have expressed their dismay and anger as more childcare providers pulled out of a Government funding scheme in recent days, prompting concerns about the state of the sector.
The cost of childcare will significantly increase for some parents as a result of the withdrawals.
Several childcare providers have decided to withdraw some or all of their centres from the Core Funding model including Mary Geary’s Childcare in Cork, Little Harvard in Leinster and Smart Steps in Donegal, citing rising costs.
Eight services have informed the Department of Children of their intention to withdraw. However, some providers said they will simply not sign their contracts for this year, rather than tell the department in advance, so the extent of the withdrawals won’t be clear until September.
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Once Upon A Time, which operates several nursery and Montessori schools across Dublin, is among the providers who last week informed parents it is withdrawing its centres in Shankill, Dundrum, Ballymount and Herbert Place from the scheme.
In an email sent to affected parents, the company said core funding is “deeply flawed” and “traps services in outdated, frozen fee structures while the cost of delivering quality childcare has continued to rise”.
The core funding grant was introduced by the Government in 2022 to assist early-learning and childcare providers with operating costs. In return for signing up to the model, operators had to commit to a fee freeze.
The Irish Times spoke to several affected parents, some of whose fees will increase by a few hundred euros per month.
One father whose children attend a Once Upon A Time centre said his family’s fees will increase from about €950 a month to €1,650, “which is greater than our mortgage repayments”. He said the news came as “a major shock” and “puts our family in a perilous financial position”.
A mother, whose children attend a different centre, said her family also faces a monthly fee increase of about €350 per child.
“I truly don’t know how we are going to be able to pay this increase and keep up with mortgage repayments,” she said. “I appreciate that costs are rising for everyone and would have been happy to pay a smaller fee increase to reflect this. However, this is an unsustainable amount for any family to have to bridge each month. I don’t know how I’m going to make ends meet.”
Anne Marie McCormack, who is a co-director of Once Upon a Time alongside her husband David McCormack, said she “completely” understands parents’ frustration.
“This decision has caused us an enormous amount of stress. It has been a very, very difficult decision for us to make because we do not want to do this to the parents,” Ms McCormack said.
Several parents questioned why the company is raising fees at a time when it is making profits.
According to its 2024 accounts, the company, which operates under the name Nurture Childcare Ltd, made a profit of €2,080,694 last year, up from €911,945 in 2023.
Directors’ remuneration and pension contributions increased from €976,173 to €1,114,717 last year. Mr and Mrs McCormack said the company’s increase in profits was down to an “accountancy correction”.
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“The extra €1.3 million referenced in our consolidated accounts relates to a revaluation of property, which is an accounting paperwork exercise, which does not present operational profit.
“While our 2024 Nurture Childcare Ltd accounts consolidated profit of over €2 million, the actual post-tax profit was €685,000. This figure represents 6.2 per cent of the turnover which is just over €11 million.”
The McCormacks said the increase in directors’ pension contributions was “a long-overdue measure to rectify underfunding in prior years, during which we were unable to contribute due to financial constraints”.
In the 2024 accounts the directors’ remuneration is listed as €737,836, while their pension contributions were €376,881.
Stephanie Roy, director of Childhood Services Ireland, the Ibec trade association which represents childcare providers, said the fact companies such as Once Upon a Time are pulling out of the core funding model “reflects wider challenges” in the sector.
“The current core funding model is becoming increasingly challenging for providers to sustain as costs rise without corresponding increases in funding,” she said. “We’ve raised these concerns with the Department of Children, as the model doesn’t fully reflect how services operate.”
A representative for the Department of Children said it “is aware of this regrettable situation involving the withdrawal of some services operated by Once Upon a Time from core funding”.
They noted that core funding “has conditions attached to reduce costs for parents, to deliver improved wages for staff, to improve service quality and to protect the investment of taxpayers’ money”.
Core funding requires centres to agree to a fee freeze and the introduction of fee caps from September 1st onwards. It also requires new pay rates for staff to be in place.
“It requires a significant degree of operational and financial transparency over how services operate so that the State can be assured that public money is being used for its intended purpose and not contributing to increased private profit.
“Core Funding provided to Once Upon a Time has increased from €1,650,958 in 2022/2023 to €2,388,958 in 2023/2024 and rose further to €2,566,963 in 2024/2025,” the department’s statement noted.
It said the company’s core funding was projected to increase to €3,293,893 from September (a 28 per cent annual increase), but this figure will change due to the withdrawal of some of its centres from the scheme.
The department said the planned increase in funding this year included “new funding specifically ring-fenced for pay”.
Even if a provider withdraws from core funding, the representative said parents can still avail of financial support via programmes such as the National Childcare Scheme.
Once Upon a Time receives core funding for 10 services across Dublin. The company is due to open an 11th service in Hansfield Square in Dublin 15.
Mr and Mrs McCormack said the projected funding it was due to receive from the department in 2025 and 2026 “reflects growth in our organisation, including Citywest, which will be operating for a full 12 months in the coming programme year at much higher occupancy levels”.
A number of parents in the four branches impacted by the fee increase were told they would have to give two months’ notice if they wish to withdraw their children from the Once Upon a Time centres. They said this was unfair due to the fact they were only given one month’s notice of the fee hike.
The McCormacks said they would have “preferred to give more notice, but we were in ongoing talks with the department until the very last moment”.
They said, given the circumstances, they will allow parents to give one month’s notice if they wish to remove their children. Parents can avail of this option until August 31st, they said.
Ahead of the general election last November, the Fianna Fáil-Fine Gael coalition committed to reduce the cost of early learning and childcare to €200 per month per child. In recent months, the Government said it will work towards this reduction during the lifetime of the current administration.
One father said “a lot of young parents voted for Fianna Fáil and Fine Gael” on the back of the pre-election promise. “We’re not seeing any reduction, we’re seeing an increase.”
