Rising costs at childcare centre - Will it have impact on working mums?

• Mum pulls child out, saying $70 extra too much
• Childcare centre says: We face rising cost too

By Tan May Ping
December 11, 2007

COME January, Ms Charon Yap said, she will have no choice but to raise the fees by $70 at two of her three childcare centres.



She has held out from doing so, but rising rents, wages and other costs are eating into the bottomline.

So, just as with property, food and petrol, even childcare centres are going to show price hikes.

Will this have an impact on working mothers?

One of them, whose 4-year-old daughter goes to Ms Yap's Eager Beaver Schoolhouse at Safra Mount Faber, has decided to pull her child out of the pre-school as she felt the fee hike was not fair.

The woman, who asked not to be named as her daughter is still at the centre, said: 'How are we to keep up if the centres decide to raise fees unreasonably?'

She pays $465 a month for full-day childcare after the $150 government childcare subsidy and a Safra member discount of about $110.

So, the $70 hike represents a 15 per cent rise for her.

She said: 'I understand that there might be some increases but $70 is too much to bear.'

Her household income is just over $3,000.

She turned to the Ministry of Community Development, Youth and Sports, which regulates and licenses childcare centres, but then learnt that it does not regulate the fees charged by operators.

Ms Yap said that the fee hike, which will also affect her outlet at Safra Yishun, is inevitable.

She said: 'We have to pay for rising manpower, rental, food and utilities costs.

'Moreover, we have been charging below the market rate and have not increased fees since we started operating seven years ago.'

She also pointed out that at the full rate of $720, $70 is less than a 10 per cent increase.

'COMPETITIVE SALARIES'
Ms Yap added that wages need to be competitive in order to retain employees. Money is also needed to maintain and upgrade equipment.

She said parents should also take into account the childcare centre's location in a club, which gives children access to facilities, such as the swimming pool and air-conditioned classrooms, and also security.

'We did expect that there would be some unhappiness, but we are not exploiting or profiteering. We need to increase costs for salaries and training in order to maintain a high level of service,' Ms Yap said.

Another operator, Ms Ivy Sim, 45, said that operators like her are facing the heat from PAP Community-Foundation (PCF) care centres, which charge lower fees.

She also said she has to contend with a neighbourhood saturated with childcare centres.

She is still mulling over whether to raise the fees at her centre, Big Apple Childcare and Development Centre in Tampines.

Ms Sim said that there are three PCF centres just a stone's throw from hers.

'It's hard to make ends meet. I would like to increase the fees, but parents will just move their children to cheaper options,' she said.

It was announced in May this year that all 30 PCF care centres will not increase their fees until July 2008.

They are also absorbing the two percentage point hike in the goods and services tax for six months.

Mid-priced operators like Ms Sim typically charge between $450 and $600 a month, while PCF-run centres charge $385 to $450.

There are, of course, the high-end centres such as Etonhouse Pre-School and Pat's Schoolhouse that still attract large numbers of children despite charging more than $1,000 a month.

Private operators typically have smaller class sizes and better facilities.

Ms Sim, who last raised her fees by $20 two years ago, said: 'Some mothers with two or three children might decide that it is more worthwhile for them to just stay athome.'

In 2004, the benefits under the Baby Bonus scheme were extended to the first and fourth child.

Other than a cash gift, parents can also use the money in the state-assisted Baby Bonus Children Development Account (for the second, third or fourth child) to pay for fees at childcare centres and kindergartens registered with the Education Ministry.

Childcare centre operators noted that the childcare subsidy given to parents was last raised in 1995.

The subsidy for working mothers is now $150 a month for full-day and $75 for half-day childcare.

And by January 2009, permanent residents will no longer be eligible for childcare subsidies.

An operator, who declined to be named, said parents view the baby bonus funds as money they can store for the future, whereas the subsidy helps them specifically with childcare centre fees.

MINISTRY SAYS
The Ministry of Community Development, Youth and Sports does not regulate matters such as fees, because childcare centres are private business entities, but it does advise centres to keep their fees affordable.

As for whether the childcare subsidy will be revised, its spokesman said: 'We understand the concerns over affordability of childcare services, and have been monitoring the situation closely.

'We will work with the childcare centre operators to manage any cost increases.'

The spokesman added that there are assistance schemes in place to help needy families, such as the Centre-Based Financial Assistance Scheme for Childcare.

Through the scheme, a family with a monthly income of $1,500 and below can receive extra childcare subsidy.

On the withdrawal of the childcare subsidy for permanent residents, she said the savings from that 'will be used for other government programmes, including any future review of existing programmes'.