The Government needs to act soon to end a severe shortage of childcare places that is causing recruitment problems and excluding women from the workforce, the employers' organisation, IBEC, says.
IBEC wants Budget measures such as tax relief to encourage private investment in childcare to help increase the number of places. Some 40,000 extra childcare places are currently needed, according to Government estimates, and demand is expected to increase by up to 50 per cent by 2011.
IBEC says it is "increasingly concerned" that Government proposals - like tax allowances for childcare - would increase the demand for childcare but not the supply. Its assistant director, Ms Aileen O'Donoghue, said it was unacceptable that the number of regulated childcare places was contracting, with a decrease of more than 2,000 places in the past year.
"It is totally unacceptable that skilled employees should be either prevented from joining or effectively forced out of the labour force because of a deficiency of childcare supply," she said, adding that private investment in childcare provision needed to be "prioritised and encouraged" through tax relief for capital investments, similar to that provided under the Section 23 tax incentive scheme for property.
IBEC also proposes once-off grants to help legitimate childcare providers comply with existing regulations.
It says measures introduced in this year's Budget aimed at encouraging employers to participate in childcare provision were inadequate and must be simplified and less restrictive.
Ms O'Donoghue said growth in childcare supply was inhibited by high property and rental prices - especially in urban areas - slow planning procedures, and difficulties in recruiting trained and professional staff.
"It is clear that the Government will have to take action on this problem in the context of the upcoming Budget but also within the National Development Plan," said Ms O'Donoghue.