What's the story with prohibitive childcare fees, asks Conor Pope?

WITH FULL-TIME teaching jobs, Gareth and Moira Allen have no choice but to send their two young sons, aged one and three, to a creche near their home. The couple are luckier than most, however, and their comparatively family-friendly working hours give them a significant degree of flexibility when it comes to drop-offs and pick-ups.

Their good fortune doesn't end there, not by a long shot. While most working parents of pre-school children in this country are spending upwards of €800 a month for every child they have in daycare, the Allens are paying less than a quarter of that amount.

And what's the secret to their low-cost childcare? Emigration.

Five years ago they moved from Dublin to Seville, where both their children were born. While virtually everything is markedly cheaper in their adopted country, even when considerably lower wages are factored in, it is the savings they have made in childcare that really stand out. Their monthly creche bill per child is €265, to which the Andalucian government contributes €100, reducing their total childcare outlay to just €330 every month. Had they stayed in Dublin, they would be paying nearly €2,000 a month.

Parents in Ireland with similarly aged children in private childcare will spend at least €60,000 over the next four years on creche fees alone. And with costs only going in one direction and the Government preparing to reveal its meanest budget for 20 years this week, things are likely to get worse for Irish parents.

A recent survey carried out by the National Children's Nurseries Association (NCNA) on childcare costs showed that the cost of childcare has increased steadily over the last two years. The price increases - in the region of 15 per cent since 2006 - are hardly surprising in the current economic climate, and creches can be forgiven for covering the cost of rising salaries and increases in food and energy costs.

The average cost of sending a toddler to a creche is €715 a month, up from €626 in 2005. Babies, meanwhile cost €802 a month. Prices vary from county to county, with the highest prices found in Dublin where it costs an average of €828 per month for a baby and €802 for toddlers, although many city centre creches charge closer to €1,000 per child.

THE WEEKLY COST of community childcare - which is subsidised by the State - is lower, but still not cheap, with places costing around €117 for toddlers and €127 for babies.

"The reason parents are paying so much is that they have to pay for everything. It is impossible for costs to come down because of the nature of the business," says Teresa Heeney, Director of Services with the NCNA. "The Government invested in supply but there has been no investment in terms of cost to parents."

She says that childcare providers "don't want to be offering places to parents at prices that they can't afford to pay but that is what they have to do. There are no fat cats in this area and no one is making lots of money."

Heeney believes that with rate increases, higher energy and insurance costs and increasing food prices, providers are increasingly stretched; they can't afford to increase prices because when they do they inevitably lose business. "I think the picture is very gloomy for both public and private childcare providers and I fear that a lot of childcare facilities will close down in the next year."

It is not only the cost of creche care that needs to be factored in by parents of young children. Average after-school care has a price tag of around €120 per week per child. Over the eight years of primary school, parents will fork out €42,000 per child, taking the total spend for parents of two young children to €150,000 on childcare before their offspring hit secondary school.

Such sums put the early childcare supplement of €1,100 given to parents of children under six into perspective - it barely covers a single month's fees for most parents.

Last year the Government spent approximately €406 million on the supplement and, according to the National Women's Council of Ireland (NWCI), it is "actually making very little difference to the overall childcare costs for parents". Orla O'Connor, head of policy at the NWCI, says the Council is "very aware of the current economic crisis" but it believes the Government still needs to "significantly redistribute resources in order to prioritise" the issue of childcare.

O'Connor told Pricewatch that childcare costs have significantly increased since the start of the year and they now "represent a second mortgage for most families. If supports to pay for childcare are not put in place, many women will be forced to give up employment."

She says the Government needs to reduce childcare costs to parents by a minimum of 50 per cent to all parents and 75 per cent to parents on low income through a national subsidisation scheme.

It doesn't seem likely that will happen any time soon. For people who are spending nearly a third of their net income on childcare costs, it won't come as any surprise to learn that the Government is ranked bottom of the EU league table for spending on childcare and early education, according to a report published by the European Commission earlier this month.

The government was found to be investing just 0.2 per cent of national income (GDP) on the services. Denmark, Sweden, Finland and France spend at least 1 per cent of GDP.

AND THE EXTRA money spent in these countries really makes a difference. In Denmark, parents pay a maximum of 30 per cent of their childcare cost with the State subsidising the rest. In France, parents who send their children to creches can get a subsidy of €600 per month while the École Maternelle opens its doors to children aged between two and five between the hours of 8.30am and 4.30pm, and is funded entirely by the state. Some 99 per cent of children attend these schools. A similar system is in place in Italy for children aged three to six.

In Sweden, parents pay no more than 3 per cent of their household income in creche fees for their first child, 2 per cent for their second and 1 per cent for their third. In Norway the parents have to pay between 28 and 45 per cent of the cost of their children's creche fees depending on their income.

In Ireland, parents pay 90 per cent of the cost themselves.

The absence of governmental support for the development of a regulated, quality, accessible childcare sector is driving prices higher, O'Connor says. "Childcare services need State investment in order to be affordable, sustainable and to meet international standards. One of the main factors for the increase in childcare costs in Ireland is that the demand for childcare places far outweighs the supply of places.

"The actual and potential demand for childcare must therefore be more adequately measured. When demand outstrips supply (coupled with increasing base costs), prices are pushed up and this makes formal, high-quality childcare unaffordable for parents."