Kildare families face extra childcare costs as providers exit deal

“WE absolutely want to remain open, we want to remain open and this is the only way we can do it. Other than that, it's just not viable.” 

So said Claire Doyle, one of the owners of Tender Years Creche Naas which in early August informed parents that they’ve been forced to exit the Core Funding contract and increase fees around 30 per cent from 1 September. 

This will mean families at Tender Years and other childcare providers who are leaving Core Funding facing an increase of hundreds of euros a month in childcare fees.

Core Funding is a grant to early learning and childcare providers towards their operating costs. Services agree to conditions of the scheme, including fee management.

“In general, the Core Funding is the problem. It's not fit for purpose for everybody and that's the issue, it suits some services and it just doesn't work for other services,” Claire told the Kildare Nationalist.

Claire explained that their fees were frozen since they entered Core Funding – they were frozen back in 2020 – but the same can’t be said of costs like lighting, heating, food and more.

“We've only got one provider for insurance, so every year they put up their fee and we don't have any options, we're stuck with just one provider. Our staff costs have dramatically increased with obviously EROs [Employment Regulation Orders] but we've a lot of long-term staff who are paid well above those rates and always were,” she said. “The increase in recruiting staff and retaining staff... recruiting agencies is what we have to go with, because it's so difficult to recruit staff within the county, we have to subsidise staff accommodation, then you've all the additional leave that staff are entitled to... it's just non stop. There's going to be auto enroll for pensions, there's sick leave, all those costs have to be covered and they're all new costs.” 

Claire revealed that many providers have to subsidise accommodation for staff. “Staff can't afford the rents, they can't get accommodation to start with and they can't afford them, whereas letting agents are more likely to rent out properties to a company who they're guaranteed their money off.” 

Speaking last Thursday (8 August), Claire explained that they had no intention of leaving Core Funding “until the issue of the contracts which was only three weeks ago… they had promised so much, and if they gave what they promised we never would have had to leave… they had said when they were going to issue the contracts there was going to be a fee increase allowed, they were going to give us more funding of up to 15% more than what we got the year before. None of that materialised.

“In reality, our increase in Core Funding was only going up three-and-a-half per cent, they were not going to allow a fee increase. There was going to be a balance that they were going to possibly allow a percentage of our fee to go up for parents, they were going to increase by 15% which would have brought us to where unfortunately we've had to go with our fee overall. None of that materialised. We lobbied and lobbied and lobbied, we had meetings after meetings after meetings with the Department, right up till last Tuesday when it was just told straight out that absolutely no amendments were going to be made, there was going to be no changes, and it was 'take it or leave it'. So, that's why we couldn't inform parents until Friday.

“Our intention was never to leave Core Funding, it was never to put our fees up, and we were hoping we would only have to put them up by a small percentage that we would have been allowed, and that Core Funding would have bridged that gap. That just didn't happen.” 

The Association of Childhood Professionals, Childhood Services Ireland/Ibec, the Federation of Early Childhood Providers, and Seas Suas together represent 80% of the childcare providers in Ireland, both community and private.

The four associations said in a recent joint statement that it is becoming “increasingly evident” that a considerable number of childcare providers will need to withdraw from Core Funding to allow their businesses to survive.

“While providers who signed up for Core Funding agreed to a fee freeze, it was done on the understanding that core funding would provide a stable source of income for their services. Rising operating costs and a competitive labour market have drastically increased the pressure on providers. Many services are stuck in historical fee freezes dating back to 2017 or before,” they said.

“With a significant number of providers set to leave core funding, we anticipate parents using these services will see their fees increase by 30%-40% in September. If this government is committed to delivering for children and ensuring Ireland is the best country in which to grow up, the next round of Core Funding needs to be co-created by the government and providers.” Providers, they said, are seeking a “meaningful partnership” with policies that are co-created with a “clear understanding” of what is required for the sector and the realities of operating within it.” Providers have identified a two-step solution they feel will support providers to remain in Core Funding, including the ability to increase their fees by €33.30, with further supports to be negotiated for those that are stuck in historical fee freezes.

They called for a commitment to ‘reset the relationship’ and begin ‘meaningful engagement’ with providers on the 2025-2026 round of Core Funding by 1 September.

“The Core Funding is money that the government were giving the creches to sustain them. If it's not fit for purpose, then it doesn't work... and it's not fit for purpose for everybody. It works for some and it doesn't work for others, and that's the issue,” Claire said. “Whereas if they just refocus and gave parents the money, like they do through the NCS [National Childcare Scheme], then parents get to choose where they go, they get all the funding themselves, and it's not about a provider, it's about parents then being able to do what they want with their funding.” She said there was “no negotiation with what was in that contract, it was 'take it or leave it'. We pleaded and begged for anything, anything to make it workable, and they just flat out said no last Tuesday, nothing is going to change.” 

Claire contended that the government “has set this up to pit the parents against the provider and that's really unfair.” 

Kildare’s Senator Fiona O’Loughlin said early childhood education is key to supporting young children’s wellbeing and subsequent development.

“I agree that we need to do more to support people in the industry so that it continues to grow as a good professional sector,” she said. “Core Funding has worked well in supporting parents and children as well as the sector itself but while costs for parents have been addressed it is evident that the childcare sector needs more supports. I have met many committed people in the sector in Kildare and they are passionate about what they do. They provide a hugely important service for parents and for their community. We must support the sector to keep it viable.” Minister of State and Kildare South TD Martin Heydon told the Kildare Nationalist that since this Government was formed in 2020, they have worked to relieve childcare costs for parents and providers, whilst also working to raise pay and conditions, encouraging recruitment and retention within the sector.

“Following on from Budget 2024, last June more than 33,000 childcare workers across the country received a pay increase, as the Government aims to attract more people to work in the industry,” he said. “Although the pay increase will be welcome, we as a government recognise that there is more to do to improve conditions within the sector, and there is scope to do more with an increase through Core Funding, which this year has increased by 15% to €331 million.

“I speak with local childcare providers regularly in Kildare, I’m very conscious of the pressure that is faced by many childcare providers across the county, and indeed the childcare sector as a whole. As a parent of children who are in and have passed through the pre school system I know the value of the great work carried out by providers and their staff and I’m determined that Budget 2025 will go further in supporting the sector.”