Warning parents facing 30pc hike in creche fees amid escalating cost crisis

Childhood Services Ireland claimed providers that have no option but to pull out of the State’s “core funding scheme” will have to raise fees by this level.

Regina Bushell, chair of the Childhood Services Ireland Council, said this is because they are legally required to meet a minimum level of pay while costs are rising, but their fees are frozen under the state scheme.

Minimum pay rates for early years educators and managers are due to rise by around 5pc from June 24.

The trade association claimed that many providers have had to close rooms just to stay open.

However, it welcomed an employment regulation order for early years educators that gives them certainty about their wages.

It said there is a need for “caution” and the fee freeze coupled with an increase in operating costs has created a crisis in the sector.

Ms Bushell said the organisation worked with a Joint Labour Committee to develop a wage rate that “worked” for the sector.

“Our fees have been frozen in many cases at 2017 levels while operating costs have increased at least 35pc over that period,” she said.

She said providers are facing enormous cost pressures from inflation, increased energy costs and interest rates, while government legislation has meant additional costs.

“We have no mechanism to raise revenue, which has led many providers to make difficult decisions to close childcare rooms,” she said.

She said other providers have pulled out of core funding in order to “create the breathing space” needed to keep their businesses sustainable.

“For the providers that have no option but to pull out of core funding, it will mean an increase of fees to parents of 25 to 30pc, as there is now a legal requirement to meet a minimum level of pay,” she added.

She said providers cannot plan as they have no idea what core funding will look like for the year ahead.

“It is June now and the Government has yet to give any indication as to how core funding will be allocated for the 2024-2025 year,” she said.

“We are delivering early learning and care, yet we are the last to know how the Government will allocate our resources to operate.”

Siptu welcomed a “long-awaited” increase to early years workers’ minimum pay rates.

Darragh O’Connor, Siptu head of strategic organising, said pay rates for around 30,000 workers will rise by approximately 5pc.

A requirement for three years paid experience for lead educators and managers to become eligible for increased rates has been removed.

“While the increase in the minimum rates of pay for early years workers is welcome, it is long overdue and does not go far enough to recognise the role early years educators and managers play in children’s development,” said Thomas Dowling, lead early years educator in Wexford and Siptu activist.

Diane Jackson, Siptu sector organiser, said the parties to the Joint Labour Committee must reconvene as soon as possible to begin the pay talks on a third pay deal.

She said wages must increase considerably to match pay rates for comparable workers in other sectors.