Hundreds of parents face childcare fee hikes as three providers drop state funding scheme deemed ‘insufficient'
Stephanie Roy, director of Ibec's Childcare Services Ireland, said the providers who are members have sent letters to parents informing them of their decision.
She said they run services at 10 locations in Dublin and Cork.
Ollie Sheehan, owner and director of Mary Geary Childcare in Carrigtwohill in Cork, runs one of the services. He said it plans to increase its fees by 34pc next month after pulling out of the scheme.
He said it is the country's largest standalone facility and provides services for 450 children on one site.
There is insufficient funding for providers
'Core Funding isn't working,' he said. 'There is insufficient funding for providers, and we are locked into fees from 2019. That's a huge problem as costs are rising. The other thing for me is that the Government has no plan to recognise high-quality childcare within the scheme.'
He added administrative costs have increased. His facility used to employ one full-time and one part-time staff member and now has three full-time and three part-time staff dealing with it.
A spokesperson at the Department of Children said eight services have withdrawn from this year's Core Funding programme to date. She said this is out of over 4,400 services that are in contract for the 2024 to 2035 programme year.
Ms Roy claimed that some providers have reached a 'tipping point' due to funding shortfalls.
If we're going towards €200 a month childcare, that means demand is going to increase
She said they do not feel they are being listened to and are frustrated with aspects of the scheme. However, she welcomed the fact that a provider forum, a commitment of the previous minister, is due to meet in September.
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Ms Roy said providers have multiple issues, including an alleged 'lack of responsiveness' from the Department of Children.
She said one issue concerns staff ratios, and the need for extra support when educators may have to leave the room or take a child to the toilet.
Ms Roy said Core Funding pays for a certain number of staff, and this does not necessarily align with the way providers operate.
She said caps on fees mean the return on investment takes longer to achieve.
'If we're going towards €200 a month childcare, that means demand is going to increase,' she said. 'At the same time the appetite for risk is going down.'
The department spokesperson said it is regrettable that any service would choose to withdraw from Core Funding.
The number of services participating in the scheme has grown each year
She said funding will increase to over €390m next month for year four of the scheme, representing an increase of over 50pc in three years.
The scheme is contingent on the new minimum rates of pay, which are set to rise by 10pc to €15 for educators and €20.25 for graduate managers.
'The department notes that warnings regarding Core Funding participation have been circulated in the summer months for the past three years,' the spokesperson said.
'However, the number of services participating in the scheme has grown each year, with record numbers of services currently engaging in the scheme.'
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