Warning of cost hikes in childcare
CHILDCARE providers have warned that parents face cost increases due to the 30c increase in the minimum wage, and an energy bill levy hike.
Early Childhood Ireland said many creches are ‘at breaking point’ and extra costs may need to be passed on to customers where there are ‘very tight margins’.
CHILDCARE industry chiefs have warned that a proposed increase in the minimum wage and rising energy bills may lead to an increase in creche costs.
Early Childhood Ireland, which represents as many as 3,500 childcare providers, said some parents may feel a hit after the it emerged last week that the hourly minimum wage will rise by 30 cents to €9.55 from January.
And childcare providers could also face higher energy bills after the Commission for Energy Regulation proposed that the publicservice obligation levy on bills goes up by 40% for consumers.
Frances Byrne, director of policy and advocacy with Early Childhood Ireland, said extra costs could be passed on to customers in cases where there are ‘very tight margins’. She told the Irish Daily Mail that many childcare providers are ‘at breaking point’.
She added: ‘A lot of them would say, “Look, I don’t take a wage myself” or “There are months of the year where I just write it off so I can pay staff over holidays”.
‘Parents feel utterly tied to the pin of their collar. A lot of our members are saying “We are really also tied to the pin of our collar”. So, by and large, services would bend over backwards not to pass it along to parents… but there isn’t much fat left on the bone.’
But Teresa Heeney, CEO of ECI, believes that passing the cost on is ‘not an option, as parents are already paying too much’, and that the Government must offer more support. ‘The key to balancing the books in childcare is for the State to step up to the plate and to invest more, substantially more,’ Ms Heeney said.
‘The people subsidising the unstable, economic model of childcare in Ireland are the childcare providers and many of them have already had enough. Increasing energy bills will have a real impact, as will a proposed increase in minimum wage, considering that so many people working in childcare are on minimum wage.’
Ms Heeney said that the average childcare service ‘operates on a break-even basis and business sustainability is a real issue’.
Speaking about salaries and wages, Ms Heeney explained the wage bill for larger settings can account for up to 80% of additional costs. She said that while ‘any increase in minimum wage will impact on the cost of childcare’, the issue of ‘fair pay for childcare professionals’ needs to be addressed in a ‘proactive and urgent manner’. She added: ‘The only increase we want to see is an increase in investment from the Government.’
Laura Erskine from MummyPages.ie said that according to her company’s research: ‘The current cost of childcare has prevented nearly half of our mums in returning to work. Our working mums are struggling financially to make ends meet, while many more stay-at-home mums feel they have no choice but to give up work after their second child because of the nature of Ireland’s unaffordable childcare model.’
Last week Children’s Minister Dr Katherine Zappone announced that capital funding for childcare services had been doubled to €8.8million, allowing for 2,200 new childcare places, building and improvement works.
But, a spokesperson for the minister said she ‘does not envisage a price hike from childcare providers and a payment of €3.5million has been made available to childcare providers towards the administration costs of delivering these
Providers are ‘at breaking point’ ‘Mothers feel they have no choice’
measures to families’. The spokeswoman added: ‘The latest figures available from the OECD suggest Ireland’s expenditure on early childhood care and education is 0.5% of GDP. This compares to the OECD average of 0.7% GDP.
‘Historically, childcare funding in Ireland has been low compared to some other countries.
‘However, over the past two budgets, childcare funding has increased by nearly 80%. As part of the upcoming estimates process, Minister Zappone will be seeking further increases to this.’
IT goes without saying the vast majority of young families are reluctant to leave the daily care of their children to strangers. The basic realities of life, however, mean that they often have little other option.
Many households can only hope to meet the mortgage payments and other monthly outgoings if both parents are out at work, even if they preferred that this was not the case. And there are plenty of homes where the extra few euro that is left over can make all the difference when it comes to putting food on the table.
Against that backdrop, the suggestion of an increase in childcare fees will be a cause for major concern right across the country. According to Early Childhood Ireland, which represents up to 3,500 service providers, charges could go up because of higher energy bills and a proposed rise in the minimum wage. Granted, there is nothing written in stone to that effect just yet. But we all know that when there are warnings of added costs, they are almost always followed through in practice.
Nobody disputes that there are substantial insurance premiums involved in the childcare industry. Equally, though, the plain fact of the matter is that those actually providing the care tend to be very modestly remunerated.
Of course, questions remain over whether it is right that people entrusted with the care of children only qualify for the minimum wage. But there are broader issues surrounding the seemingly autonomous manner in which the childcare system is allowed to operate.
For all the protestations about ‘very tight margins’ and creche owners being at ‘breaking point’, the reality is that a lot of canny individuals made serious money out of the industry in the Celtic Tiger years.
It is a little bit rich for them to start playing the poor mouth at this stage. Not only is there a hollow ring to the claims, their tales of woe are unlikely to find much sympathy among ordinary families.
Meanwhile, they are also drawing attention to the argument that the childcare industry is subject to far less regulation than ought to be the case. Now that we have had a reminder, the Government should remedy that situation without any further delay.