Thursday 17 October 2013

Tackling Singapore's childcare crunch

Steps are being taken to broaden the pool of players, attract more teachers
By Priscilla Goy And Janice Tai, The Straits Times, 16 Oct 2013

JUST Kids Learning Place has opened one new centre every year since 2004 - until recently.

The childcare chain, which has seven centres, has not been able to find a suitable site in the past two years due to the keen competition among operators for space to expand.

This has in turn pushed up rental rates to as much as $40,000 from $20,000 five years ago.

"While there is strong demand for childcare places, we find it hard to expand because of the lack of suitable sites and trained teachers," said Ms Lurvin Lee, director of the pre-school chain.

Meanwhile, demand for childcare services has almost doubled in the past eight years, as more working parents enrol their children in pre-schools.

Last year, 75,530 children were enrolled in these centres, up from 44,224 in 2005 - even though the number of children aged seven and below has remained stable at about 280,000 in the past decade.

Queueing up for a childcare place

THE result: a worsening childcare crunch, with some parents having to wait as long as two years for a place at the more popular centres.

In "hot" areas like Punggol and Sengkang, which tend to attract more young couples, the figure can go up to close to 90 per cent.

To meet the growing demand, the Early Childhood Development Agency, which oversees the sector, has recently rolled out a slew of measures to encourage operators to set up more centres.

These include offering rental subsidies to eligible private operators who agree to keep fees affordable.

The aim is to add 20,000 more places by 2017 - enough for one in two children, up from one in three now.

But the impact of the measures will go beyond adding places. They will allow the Government to better regulate the industry in terms of fees and quality, short of nationalising the sector as some have suggested, say observers.

Greater control over fees

THE rising cost of childcare has been a bugbear for parents.

According to latest figures, the median fee for a full-day childcare programme has surged to $788 a month as at the end of August, up from $620 in 2008.

Some parents have also complained about regular fee hikes by some of the pre-schools.

This has led to concerns about quality childcare getting out of reach for the average Singaporean family.

Currently, the two anchor operators - NTUC's My First Skool and the PAP Community Foundation - get government help, such as rental subsidies and priority in securing HDB premises for new centres.

In exchange, they have to keep fees below the industry median.

But commercial operators, who account for close to 70 per cent of the centres here, do not have to follow fee guidelines.

However, this would change under a new scheme which allows commercial entities to be anchor operators. They will be required to keep fees below $720 a month for full-day childcare.

The Straits Times understands that at least 10 of the bigger operators have applied for the scheme. Several other new schemes also require operators to keep their fees low.

Said Non-Constituency MP Yee Jenn Jong, who provides educational resources to schools: "When the Government gives all these goodies, there are fee conditions and this gives them a hold over the fees of a larger pool of childcare centres."

Bigger say over quality

THE quality of pre-school programmes is another concern.

Most of the new schemes announced this year have one thing in common: the quality of programme is a prerequisite.

Early childhood expert Khoo Kim Choo said this shows that the Government is being "more stringent" in ensuring quality standards, and at the end of the day, parents stand to benefit.

"By introducing more players in the anchor operator scheme, the good-quality programmes are more accessible to the masses," said Dr Khoo, who runs the Preschool for Multiple Intelligences.

"There would also be more competition among the big players, and this means greater diversity and more choices for parents."

Parent Felix Tan, who has a one-year-old son in childcare and plans to send his daughter, who will be born in December, to infant-care, welcomed the measures.

Said the 29-year-old IT consultant: "There are now just two options for the mass market.

"Having more anchor operators would lead to more competition and hopefully they would improve the quality of their programmes."

But one key concern stands in the way of the Government's efforts to grow the childcare sector: a shortage of teachers.

The low pay and the lack of opportunities for career progression has long been a bugbear in attracting and retaining talent in the industry, said Mr Ang Teck Hua, director of the Centre for Child Study at Temasek Polytechnic.

The rate of teachers dropping out of the industry is high partly because the admission process into early childhood courses is too lax, he pointed out.

"While we need to increase the number of teachers, we also have to attract the right people," he said.

He suggested tweaking the polytechnic admissions process and having a mandatory mentoring scheme for new teachers.

The Early Childhood Development Agency is expected to announce new manpower initiatives for the sector next month.

Said Ms Lee of Just Kids Learning Place: "Training teachers, especially good ones, will take much longer than building centres."

The big shake-up
By Janice Tai And Priscilla Goy, The Straits Times, 16 Oct 2013

A BIG shake-up of the childcare sector may be on the cards as the new schemes aimed at ramping up childcare places kick in.

Some observers are expecting a consolidation of the industry, which has more than 1,000 centres run by non-profit, commercial and voluntary welfare organisations.

A few big players are likely to dominate the sector with the anchor operator scheme expanded to include commercial operators.

Anchor operators receive government grants, among other things, in exchange for keeping fees low.

To qualify for the scheme, operators have to be fairly big players who have the financial muscle to ramp up childcare places quickly.

Currently, there are only two non-profit anchor operators, NTUC's My First Skool and the PAP Community Foundation.

"This is a good thing because you need economies of scale to offer good programmes at affordable prices," said Non-Constituency MP Yee Jenn Jong, who provides educational resources to schools.

"The less serious ones will get squeezed out as the industry adjusts to these changes."

But some are concerned that new entrants may find it harder to gain a footing in the industry.

Said Dr Christine Chen, president of the Association for Early Childhood Educators (Singapore): "New entrants which offer unique programmes may find it hard to compete with the big players and the authorities should still support the dreams of these entrepreneurs."

New childcare-related schemes announced this year

- When: January
- What: The subsidies, which were handed out from April, are for working mothers and tiered according to household income, with the lower-income families receiving the most support.
Families with monthly household incomes of $2,500 or less will be subsidised up to $740 a month, making childcare virtually free as median fees are about $750.
- Why: The move is aimed at helping low- to middle-income families cope with childcare costs and encourage families to have children.

- When: June
- What: Putting up the highest bid no longer guarantees a commercial operator a much-coveted HDB site.
The authorities now look at a range of factors, such as the quality of its programmes and its fees, under the new tender criteria. The bid price makes up only half the score.
- Why: This could lead to more affordable childcare services.
The previous practice of awarding HDB sites based solely on price had sparked bidding wars among operators and often led to higher fees for parents.

- When: June
- What: The scheme was previously opened only to non-profit operators. The anchor operators - usually the bigger players - get government help such as rental subsidies and priority in securing HDB premises.
In exchange, they have to keep fees below the industry median, which is about $788 a month for a full-day childcare programme.

Currently, there are two anchor operators, NTUC's My First Skool and the PAP Community Foundation.

Under the new scheme, commercial operators can also apply for grants to set up centres in the heartland.

They are required to keep fees below $720 a month for full-day childcare. The new anchor operators will be made known at year's end.
- Why: The move is aimed at providing cheaper and better pre-school programmes for the mass market.

- When: August
- What: Under the new scheme, centres run by voluntary welfare organisations are eligible for grants, which can cover half of the start-up costs for new centres in HDB estates. Previously, they received grants of up to 20 per cent.
- Why: To support smaller operators which do not qualify for other schemes, and may be squeezed out of the market.

- When: September
- What: Small and medium-sized operators, including commercial ones, can apply for rental subsidies of 30 to 60 per cent when they set up centres in commercial premises, such as malls or in areas with high demand for childcare services. These areas include Punggol and Woodlands.
Previously, subsidies were given to eligible operators only for centres in HDB premises.

But operators must keep fees below $850 a month for full-day childcare programmes.

To house the new centres, developers of commercial premises will also be given incentives - in the form of more floor area - when they set aside space for childcare facilities.
- Why: To ease the childcare crunch in high-demand areas.


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