Calls for  Urgent action to ensure provisions are made to prevent collapse

by Rachel Cunningham
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By Rachel Cunningham

A Dublin-based childcare provider has warrned that hundreds of childcare services will be forced to close due to mounting costs if the government does not rapidly intervene.

Founder and CEO of Tigers Childcare, Karen Clince, said that the cost of running a childcare centre has become increasingly challenging, primarily driven by wage inflation, as providers battle to attract and retain qualified staff. 

Despite the introduction of new funding to support the sector last September, Ms Clince, who also serves as the chair of the Fingal Childcare Committee, claimed many settings are at risk of shutting down.

Despite Minister Roderic O’Gorman’s announcement of a €28 million funding increase for year two starting in September, bringing the total budget to €287 million, the CEO has said that the increase falls short of addressing the soaring costs of running childcare services.

With fees frozen, she has called for urgent action to ensure adequate provisions are made to prevent the collapse of the sector.

“The cost of running a childcare facility is at an all-time high, not only due to massive inflation but also ever-escalating wages, which account for 70 per cent of our costs,” said Ms Clince.

“Wages are rising due to increased competition to attract and retain qualified staff, yet under the scheme we are precluded from increasing fees from pre-Covid levels to meet these costs.

“While the government took a step in the right direction last year by implementing new minimum hourly rates for workers, there remains a huge discrepancy between the funding provided and the actual cost of employing high-quality staff.  

“If the government does not act fast to take a proper look at the situation on the ground and commit to fully understanding what is needed to help the sector, hundreds of settings will close.”

As growing numbers of professionals continue to leave the sector, increased competition for hiring has resulted in wages surpassing last September’s budget funding coverage.

“To keep services open and attract good people, we have to respond to wage demands as they stand today. The data used to determine the funding allocation in year one of the programme is no longer relevant, as the market has moved on and the recently announced funding package for year two is based on old data,” said Ms Clince.

The CEO criticised the government for its failure to meaningfully engage with the sector to find a solution.

“It’s crucial that we work together now to address these hurdles before they spiral out of control. Without immediate engagement and intervention, the viability of the childcare sector hangs precariously in the balance,” she concluded.

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