Friday 27 June 2014

Why childcare supply and demand don't add up

Why are there queues for childcare centres when national figures show there are vacancies available? Inflated demand and mismatch in prices help explain that discrepancy.
By Priscilla Goy, The Straits Times, 26 Jun 2014

QUEUEING is said to be one of Singapore's national pastimes. People line up for anything, from the latest tech gadget to toys and Toto tickets. But sometimes, a long queue prompts a sharply worded statement from the authorities.

Late last month, the Early Childhood Development Agency (ECDA) told childcare operator E-Bridge to "thoroughly review" its registration process. This was after more than 100 people queued for a place at one of its new centres in Punggol - a day before registration opened.

Demand for childcare services is known to be particularly high in Punggol and Sengkang, which are new towns with many young families. But hasn't the Government ramped up building of childcare centres in recent months? Is there a shortage of childcare places, or is there something else going on?

To answer this, first consider figures published on the ECDA Child Care Link website. This shows there are still childcare places lying vacant.

According to the latest available figures, as of April, the number of children enrolled in childcare centres as a proportion of capacity is 80.7 per cent islandwide, 82.1 per cent in Sengkang and 86.1 per cent in Punggol.

While total enrolment has almost doubled in the past eight years, so has the number of full-day childcare places.

More centres are continuing to be set up, to provide enough places for one in two children, up from one in three last year.

But hairdresser Stephy Lim, 26, who was first in line at E-Bridge in Punggol, said she did not feel the effects of this on the ground.

She added: "I'm not surprised by the length of the queue, because there are also hundreds on waiting lists at other centres."

How does one square long wait lists with official figures that show vacancies still exist?

One answer is that the long wait lists show inflated, not genuine, demand.

Centre operators say there is a lot of duplication, with parents putting their children's names down for places at several centres at the same time.

Some parents who have secured childcare places in a centre do not bother to call to remove their names on the wait lists at others. This "inflates the perceived demand for childcare services", said an ECDA spokesman, so the length of a queue is not the best indicator of demand.

Some parents also put their names down for enrolment ahead of time. At the new E-Bridge centre in Punggol, parents registered for 360 places. A spokesman said 26 per cent were applying for enrolment next year or later, not the new term in July/August this year.

A check with five other operators in the area this week also found that it is common for some parents offered a place to turn it down, or fail to show up when invited to visit the centre. Parents who do this form 10 to 60 per cent of those on wait lists. Parents may say their children have already secured a place elsewhere, or they may have changed caregiving arrangements, such as deciding to hire a maid.

To avoid such duplication, ECDA is putting together a database which will filter out repeat applications and reveal the actual number of people waiting for a place. The Registration Management System will be ready in the third quarter of this year.

"Parents who are registered on the system will also receive advice on other centres in the neighbourhood with vacancies, should the centre of their choice not have an immediate vacancy," said the ECDA spokesman.

Another reason for the long queues: a mismatch between demand and supply.

There are places available in more expensive centres, but parents may prefer cheaper options.

A father once forwarded me an e-mail in which ECDA suggested to him nine centres that had immediate vacancies, after he lodged a complaint about another centre. He said he did not enrol his daughter in any of the suggested centres "because those are too costly".

Among those suggested, five charged more than $1,500 a month for full-day childcare - more than double the $720 fee cap for anchor operators, which get priority in securing Housing Board sites but have to keep fees low while providing quality education at the same time.

More parents will flock to these centres as they get more "value for money", said early childhood expert Khoo Kim Choo.

A look at the online list of centres in Sengkang is instructive. Of the 71 centres offering full-day childcare for three- year-olds, about three-quarters are full or have limited vacancies.

Of those with "vacancies available", about two-thirds charge fees exceeding $900 a month.

To be sure, some centres like well-known Pat's Schoolhouse - the most expensive centre on the list - remain popular despite charging nearly $2,000 a month.

A third reason for the long queues despite official figures showing vacancies: Some centres may not be operating at full capacity because they cannot get enough staff.

The Government imposes staff-child ratio requirements and centres cannot take in more children if they do not have enough teachers, said Dr Khoo.

It will take time for centres to hire enough staff. Meanwhile, wait lists may swell - but since many parents put their children's names one or two years in advance, many of these centres may be able to hire staff in time for enrolment in a year or two.

Given the ground problems - inflated demand, mismatch between demand and supply, and not being able to hire enough staff - what should be done to ease parents' access to childcare places for their young children?

Merely building more centres is not a solution, since there is no shortage overall.

Rather, getting a better picture of actual demand and supply is more useful. Here, the ECDA database for registration will help.

Parents too can be civic-minded and register only at places they intend to enrol their children in, and not hedge their bets with multiple registrations.

Otherwise, the queue is clogged up by anxious parents, causing a spiral of anxiety all round.

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