Tuesday 25 March 2014

Childcare fee hike last year highest in at least 8 years

Pre-school players point to higher staff costs amid rising inflation, rents
By Priscilla Goy, The Straits Times, 24 Mar 2014

CHILDCARE fees increased again last year, in the steepest rise over at least eight years.

The median monthly fee for a full-day childcare programme was $830 last year, $80 higher than in 2012, statistics from the Early Childhood Development Agency (ECDA), which oversees the pre-school sector, showed.

Before last year, the median fee had not gone up by more than $45 year on year since 2005.

While inflation and rents have been climbing, pre-school players said the spike in fees last year could be due mainly to higher staff costs.

Agape Little Uni director Joyce Chan said staff salaries have risen by 10 per cent to 20 per cent in the past two years because she needed to pay competitive salaries to attract and retain teachers.

"Teachers are better qualified these days, so there is pressure for childcare centres to attract teachers of good quality, and staff costs have been increasing exponentially," she said.

The pre-school operator raised its monthly fees by about $100 for newly enrolled children last year.

The director of childcare centre operator Sheffield Kidsworld, Mr Puhalenthi Murugesan, agreed on the need to attract good teachers. He said the rise in staff costs has been "drastic", at about 40 per cent in the past two years.

"We also want to hire more teachers to keep the staff-pupil ratio low, and the levies for hiring foreign teachers have risen."

Monthly fees increased by an average of $50 last year across its three centres here.

Early childhood expert Khoo Kim Choo said pay has gone up as the demand for teachers is exceeding supply. "The number of teachers available cannot keep up with the numbers required in new and existing centres," she said.

The Government has been ramping up the number of childcare centres to meet growing demand. There were 1,083 centres last year, up from 1,016 in 2012.

The latest increase in fees came shortly after enhanced childcare subsidies kicked in early last year.

From last April, additional subsidies have been given to families with a monthly household income of up to $7,500. They are tiered according to household income, with poorer families receiving the most support. Two-thirds of households here - about 120,000 families with young children - qualify for the higher subsidies.

These are given on top of the basic subsidy of $300 a month for full-day childcare for all parents, regardless of income bracket.

A spokesman for the ECDA said the extra subsidies are likely enough to act as a buffer for most parents from the effect of the fee hikes. For instance, an $80 fee increase is lower than the extra subsidies of $100 to $440.

Minister for Social and Family Development Chan Chun Sing told The Straits Times last month that he was focusing more on the lower- and middle-income families who use childcare services.

He had said: "There will always be one extreme end where people are just going for the niche programmes and so forth."

But some parents say the increase in fees eats into the savings generated by the subsidies.

Administrative officer Vivian Tan, 34, is paying about $100 more a month this year, after fees increased at the centre her two children attend. Hoping for more state funding, she said: "Childcare is a public good that everyone should be able to pay for."

Customer service officer Lee Mei Ling, 33, considers herself lucky that fees did not go up last year at the childcare centre which her two children go to, but worries this may change.

"The additional subsidy helps. But I think fees will increase later on, and I may end up paying as much as I did before the subsidies were enhanced," she said.

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