Record State spending to reduce childcare fees may not be enough

Budget 2023: Unprecedented expenditure will help families but childcare costs remain too high for some

Government spending on childcare will reach €1 billion next year, but even this unprecedented expenditure is seen as just a start for what is needed to meet the high cost of childcare.

The reduction in childcare fees by way of a big jump in subsidies through the National Childcare Scheme announced by Minister for Public Expenditure and Reform Michael McGrath in the budget will be welcome in the new year after what will be a brutal winter for household costs.

The cut of up to 25 per cent in fees, at a cost of €121 million to the State, will help family budgets, while increased funding for childcare facilities through increased public money for the Core Funding programme will help providers facing their own cost increases.

The figures involved are meaningful: childcare fees are being cut by up to 25 per cent. The reductions amount to an average saving of about €1,200 per child per year, up to a maximum of €2,100 a year for the full 45 hours of childcare for children up to the age of 15.


Minister for Children Roderic O’Gorman said he wanted the funding for childcare providers nailed down first as it tied creches and other childcare facilities to an agreement to freeze fees in return for funding, guaranteeing that any reductions in fees would be passed on to parents.

A further €59 million has been allocated towards Core Funding, in addition to the €207 million announced in last year’s budget. That funding helps address issues around supply, guaranteeing an increase in supply for infants and toddlers where childcare places were most needed at a time when childcare facilities were under financial pressure in the face of soaring inflation.

For employees, improved pay and conditions under an already announced Government Employment Regulation Order will help enhance job security for childcare staff.

In response to the Budget 2023 measures, trade union and family advocacy groups were quick to call for more radical funding plans through further support measures in the budget next year and the year after, and even a move to a fully-funded universal system of public childcare.

While reduced childcare costs will no doubt help, some parents will still be weighing up whether it is worth returning to the workforce with childcare costs remaining high as they juggle all of the other increases in household budgets this winter. O’Gorman said the biggest increase in childcare spending shows the Government’s commitment to sustained investment “so parents don’t have to make those difficult choices”. But the unknowable is just how high household costs will go this winter.

Childcare is likely to be a cost the Government will have to return to again next year, notwithstanding the record spending in this budget cycle.