THE FEDERATION OF Early Childhood Providers (FECP) has said that a planned fee freeze for childcare set to come into effect in September is “unworkable” for Early Childhood Care and Education (ECCE) programme operators. 

A protest organised by the FECP will take place outside the Dáil tomorrow to urge the Government to stop the fee freeze and allocate more funding to ECCE preschools.

The fee freeze forms part of the new core funding model for childcare, introduced by Children’s Minister Roderic O’Gorman last year. 

At the time, he said the model was the key to unlocking some of the most challenging issues in the current funding system and offers a new basis on which to build partnership between the State and providers.

Department sources have said the model will lead to the overwhelming majority of services receiving an increase in funding.

Under the core funding model, fees for Early Learning and Care (ELC) and School Age Childcare (SAC) will be frozen from September at the rate that was in place in September 2021, which is hoped will approve affordability for parents. 

The fee freeze will operate from September 2022 to August 2023, and in order to access the core funding, childcare providers will have to sign up to the freeze as part of their contract, which are set to be published next week.

The FECP has said that the fee freeze cannot be agreed when the rate of inflation has increased from 2.1% in 2021 to 7.8% last month.

A survey of more than 1,000 FECP members found that over 260 childcare providers will not remain open next year due to a lack of funding.

The survey found that 5.66% of providers reported that their service will not remain open, rising to 7.5% of ECCE-only services.

It also found that 77% of services reported that core funding will not enable them to give staff a raise next year, with over half of providers expecting costs to rise more than 15% next year.

Core funding budget

€221 million will be allocated to the core funding model, including €14.4 million in reallocated investment since the Budget announcement.

This is projected to help improve pay and conditions in the sector, and in turn, enable parental fees to be controlled by the State, so that the full affordability benefits of the ECCE programme and the National Childcare Scheme (NCS) can be realised.

€138 million is expected to be allocated to support staffing costs and improve pay and conditions, alongside €25 million to support administration and €20 million to reflect increases in non-staff overheads. 

This €183 million will be distributed based on capacity, which is dependent on the level of staff, the space available and the hours of operation on a weekly basis. Department sources say that this means that the more service that is being delivered, the greater the level of funding that will be received. 

€38 million of the budget will be used to support the employment of graduates to the sector and fix anomalies in the existing funding approach for graduates. 

FECP President Elaine Dunne said the core funding model is a workable solution to many issues within the sector, but that it misses an opportunity to “offer viability” to ECCE preschools.

In a statement, she said: “ECCE services represent one third of all childcare providers and was a vulnerable sector even before Covid. Now, in the context of inflation, historically low funding, staffing and regulatory pressures, many services are in real financial difficulty.”

She said that core funding has not addressed the underlying causes, or provided a path to sustainability.

Dunne is also calling for the ECCE rate of funding per child to be increased from €69 to €100 to account for inflation, something Department sources have said is not being considered.

“Service closures aren’t easily reversed, so Government needs to engage on the problem now, and recognise the research and analysis in support of a sustainable childcare sector,” she said.

Taoiseach Micheál Martin confirmed yesterday that it is the Government’s objective to cut childcare costs for families before Christmas.

“Childcare is a big issue. It’s a very significant cost pressure on families. And we’re going to look at that,” he told reporters at the National Economic Dialogue at Dublin Castle.

“We’re very clear across government, that the next budget has to look at affordability issues around childcare. So that certainly is an issue that will merit consideration.”