Ireland’s childcare cost crisis: ‘My friends in Finland pay €150 per month for creche. My husband and I pay €1,100′

Orla, a mother of three children under seven, was confident this was the year her monthly childcare costs would finally come down. “We have struggled over the last number of years to pay childcare fees of €1,200 to €1,400 for less than full-time care,” says the public sector worker, who lives in Wicklow.

“With the media coverage about Government measures to reduce creche fees, I was expecting our fees to fall well below the €1,000 mark.” Instead, she was in for a shock. “My childcare costs are now higher than ever at €1,600 per month, even though I would be considered a part-time user.”

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Orla does not want to give her real name in case her children’s creche thinks she is being critical of the management or staff, when all of her frustration is directed at failures by successive governments to tackle the childcare crisis.

She was one of almost 50 parents to date who have responded to an invitation by The Irish Times for readers to share their experiences of childcare costs as another school term gets under way. On the lower end of the scale, parents pay €90 per week for a single child in a creche in Roscommon. Others pay more than €2,500 per month for two children in the Dún Laoghaire-Rathdown area.

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Another family pay around €27,040 annually to a “brilliant” nanny, who just this week gave notice because she can make €15 per hour closer to home, instead of the €13 per hour she was getting. “I’m beyond stressed at what we do now. I need to stay working,” says this nanny’s employer, who is nearly eight months’ pregnant with her second child.

She is left “making desperate pleas to creches, but no doubt they are getting the same tears at the door from other parents. I may need to go on sick leave early to mind my child, putting additional pressure on my employer, my family and my health.”

If the cost of two children in full-time formal care here is compared with other OECD countries, ‘all of the reports show Ireland coming out on top with really, really high childcare costs’

While a handful of parents reported a reduction in what they expect to pay this year in childcare costs, for most the measures implemented by Government do not “scratch the surface”, as one parent put it.

One of the problems is that Ireland has so much catching up to do, says Dr Mary Moloney, a course co-ordinator in Early Childhood Education at Mary Immaculate College in Limerick. “When the formal childcare sector really got off the ground back in 2000, it was seen as a mechanism to get women back into the labour market. But very little attention was paid to what it was going to cost to do that.” All the focus was on developing the physical infrastructure, she says.

More than 20 years on, parents are paying the price in the form of what are among the highest childcare costs in the Organisation for Economic Co-operation and Development (OECD) region, according to an Economic and Social Research Institute report published in 2019. Dr Karina Doorley, an author of the report, points out that if the cost of two children in full-time formal care here is compared with other OECD countries, “all of the reports show Ireland coming out on top with really, really high childcare costs”. In reality, few parents can afford to pay for full-time hours in a formal childcare setting.

How did we end up here? Dr Moloney points to the lack of funding and the fact that Ireland has “some of the best and probably some of the most stringent regulations in the world. But to comply with regulation costs money.”

Providers are limited by the size of the building they occupy, so cannot offer more places to more children to allay their own costs. When you put it all together, says Dr Moloney, “it’s a lose-lose situation for everyone. I think the Government has finally realised that they do have to invest if they want quality, and want the sector to be sustainable.”

“Childcare is probably no more expensive to deliver here than anywhere else. The difference is that it is actually being subsidised at a much higher level in other countries,” says Regina Bushell, managing director of Grovelands Childcare in Athlone and chairwoman of Seas Suas, an organisation representing early education providers.

What we do know, however, is that “the availability of high-quality, affordable childcare is linked to higher female labour supply,” says Dr Doorley. And research has shown it is not just parents who benefit. “There is a mass of literature over the last 20 years about the benefits of investing in really good-quality, early childcare interventions. Most of it says that it becomes cost neutral. If you invest in good-quality childcare, it pays dividends in the next generation,” she adds, pointing out that children from low-income households benefit most. “They have better outcomes in terms of education, in terms of labour market, health, crime. These things tend to pay for themselves” if a government makes a decision “to invest heavily in this area”.

Minister for Children Roderic O’Gorman has said he wants the average cost of childcare to be halved over the next two budgets. Specific measures already being delivered include a €221 million Core Funding scheme, which offers grants to childcare providers to help them meet operating costs and will guarantee a minimum salary to workers. Those who sign up to it must agree to freeze fees until 2023 at September 2021 rates. Most have signed up, although around 40 smaller providers have pointed to an anomaly which they believe means Core Funding will not cover their costs.

But having fees frozen at €1,000 or more a month is not much help to parents struggling right now with a rising cost of living, says Dr Moloney. Parents “can’t wait two years for change”.

The situation is also far from ideal for childcare providers, Bushell says. “We agreed to freeze our fees at last year’s level, but since we talked about that two years ago, our costs have gone up substantially.”

So the big question, says Dr Moloney, is: “What’s going to happen in the budget? Are we going to see a 25 per cent reduction? Are we going to see a 30 per cent reduction?” And how might those savings be delivered?

There are existing mechanisms through which this can be done, including the National Childcare Scheme (NCS), which provides means-tested subsidies towards the cost of childcare for families on “reckonable” (after-tax) incomes of up to €60,000. Alternatively, the scheme offers a universal subsidy of 50 cent per hour to families with children aged up to 15 in formal childcare. The Early Childhood Care and Education Scheme (ECCE) also provides three free hours’ per day for all children currently aged between two years and 8 months and five-and-a-half.

Dr Moloney believes the universal subsidy is an obvious area for reform. “It’s an insult in the current climate to offer anyone 50 cents towards what is actually the equivalent of a second mortgage.”

[ Covid response should be the model for tackling the cost of living crisis ]

In Orla’s case, the family’s NCS subsidy has actually been cut. “My daughter turns three in March but she will not qualify for the ECCE scheme until the following September. Meanwhile, the NCS subsidy went from €1.21 when she was one, to €0.68 cents when she was two, to €0.50 cents.”

What has changed for the family is that “our take-home salary has gone from €58,429 to €62,263.” The cut-off for the NCS is a reckonable income of €60,000, “meaning we just miss out on it”.

Dr Doorley suggests these subsidies should be tapered-off in a more gradual way. “It’s a very progressive subsidy, in that you get a lot if you’re on a really low income.” But the current model tapers off rapidly as income rises, meaning it may act as a disincentive to parents to increase their hours or to avail of better-paid work. “It’s the squeezed middle who are constantly caught with the high cost of childcare,” says Dr Moloney.

Another issue raised by parents is that part-time hours have all but disappeared from many creches. “It works out cheaper to put my youngest in for five full days – at a cost of €920 – than it was to put her in for two full days and three part-time days. The running costs for staff mean they have to base their pricing figures on full-time users,” Orla says.

‘Is that the world we want for people? Once you have a family you are forced into giving up your hard-earned career?’

“After-school care can no longer be paid for by the hour – so even though I only need childcare for one hour twice a week [for her older children], it will be €600. That is three weeks’ worth of my wages and when I add on petrol and lunches it makes more sense for me not to work”, especially as she has had to take unpaid parental leave to pick them up early two days a week.

“Is that the world we want for people? Once you have a family you are forced into giving up your hard-earned career? I am raising a daughter and I want a future where she can choose to have her career and a family if she wishes.”

For many parents, there is a frustrating sense that whatever promises the Government might make, the cost of childcare will remain hugely out of sync with the situation in other countries. “A relative in Sweden pays €200 a month for subsidised preschool care, while another relative’s preschool care in Japan is €400 a month for six days a week full time,” says one parent.

Others cite Finland, Portugal, Hungary and Belgium as examples of countries that seem to be able to get childcare right. “My friends in Finland are paying €150 per month for creche,” says another. “My husband and I pay €1,100.”

The cost and lack of part-time care are being exacerbated by another burgeoning issue: a crisis in baby care. Dr Moloney says there is a global staffing crisis in the early childcare sector, which is particularly acute in Dublin because of the cost of living. Regulations are part of the reason for the squeeze on baby places.

“We’re looking at one qualified early childhood educator for every three babies. That’s labour-intensive, and let’s call a spade a spade, there’s no money in it.” As a result, there are fewer and fewer spaces for babies. “One creche is fully booked until January 2024, yet only takes babies under the age of one,” says one parent in Dublin, meaning some of the babies on the waiting list have not yet been conceived.

“We haven’t seen that yet,” says Bushell. “But we have had parents who had only just found out they were pregnant and they were immediately in to register their child.” Parents who cannot get a place for their child until they turn 18 months are being forced to eke out unpaid leave or turn to a childminder.

‘My wife is working full time and making maybe €70 a week more than the cost of childcare’

No matter what benefits or schemes the Government introduces, they are unlikely to help many of the families of the estimated 15,000 children cared for by a childminder. “The promise by the Government to further subsidise childcare is a bad joke to us. They’re promising to offset the cost of creches, which are irrelevant to us as we can’t get a place in one,” says one father, who says the family have just started paying €300 a week to a private nanny to mind his nine-month-old daughter. “My wife is working full time and making maybe €70 a week more than the cost of childcare.”

For years, a huge section of the workforce was reliant on a childcare black market, and yet the policy of successive governments was to turn a blind eye. The Government’s new Action Plan on child-minding has set out as one of its objectives to extend the NCS scheme to more parents who use childminders. But they will need to register with the child and family agency Tusla, which has been a significant stumbling block. Since 2019, childminders caring for six or more children of any age, or three or more preschool children, have been required to register with the agency; yet by September 2020 only 77 had done so.

The actual number of unregistered childminders is unknown. A Department of Children-commissioned survey of parents carried out by IPSOS-MRBI in May 2020 indicated that, before Covid, 15 per cent of children under 14 were cared for by a childminder in the childminder’s home; 6 per cent by an au pair or nanny in the child’s home, and 27 per cent were in centre-based care. “Child-minding in Ireland is almost entirely unregulated and in some ways invisible,” the report acknowledged.

Dr Moloney believes childminders are worried that by registering with Tusla, they will open themselves up to inspections designed for more formal childcare settings. Some have fears, too, about potential Revenue implications.

The net effect of all this – the lack of places, the escalating costs, the stress of trying to secure reliable care – is that young families are being forced to make difficult decisions about whether and when to have more children. Versions of the statement, “I want my child to have a sibling but I can’t afford it” are a common refrain in parents’ stories of navigating the childcare crisis. “The system in Ireland needs to change. The cost of creche prevents us from having another baby,” is how one woman puts it. Another says: “We want to give our child a sibling... I don’t know how I am going to afford both.”

“Currently, the internationally recommended investment in childcare is 1 per cent of GDP,” says Dr Moloney. “Ireland invests 0.2 per cent. That’s the gap. And when parents ask why it is so expensive here, that is the answer.”

A spokesman for Mr O’Gorman said: “The Minister appreciates that early learning and childcare costs can be a significant burden for parents.” He said the NCS universal subsidy had been extended to all children under 15, estimated to benefit up to 40,000 by up to €1,170 per annum, while 95 per cent of providers had committed to not increasing fees

He said the department was making significant investment to support parents with the costs of paying for early learning and childcare and to support providers with the costs of delivering early learning and childcare.

“The National Action Plan for Childminding commits to opening the National Childcare Scheme to childminders at the earliest possible opportunity, though it will be necessary first to develop and introduce childminder-specific regulations, and to give childminders adequate time and support to meet regulatory requirements.”