Childcare fees on the up and up

• dragg

  17 Feb 11, 09:25

  • Operators blame rising rental costs and teacher salaries
    By Theresa Tan
    
    HOUSEWIFE Fenny Joman, 37, recently took her five-year-old son out of Rainbow Cove Preschool along Upper East Coast Road when it raised the fees for its full-day programme from $800 to $1,000.
    
    The mother of two boys said: 'You can raise fees, but a 25 per cent increase is ridiculous. It's also very taxing to pay so much for childcare.'
    
    Childcare fees for her elder son cost about 30 per cent of her project manager husband's income. Her younger son is 15 months old.
    
    A check with the Ministry of Community Development, Youth and Sports (MCYS), which compiles childcare statistics, found that fees have risen steadily over the past five years.
    
    Last December, the average full-day childcare fee was $776 a month, up 28 per cent from $608 in 2005.
    
    Over that period, the number of childcare centres grew from 713 to 874, but keener competition did not bring down prices.
    
    Ten childcare operators - which run more than 260 centres - blamed skyrocketing staff and rental costs for the increases.
    
    They said better-qualified teachers and a high demand for staff among proliferating centres had driven salaries up.
    
    Coupled with higher rentals, they said they had no choice but to raise fees. Salaries and rentals make up at least 80 per cent of operating costs.
    
    Last year, there were 63,955 children enrolled in childcare centres, more commonly known as preschools, which take in those aged between 18 months and six years.
    
    Childcare centre programmes typically run for the entire day, usually from 7am to 7 pm, compared to kindergarten classes, which run for only a few hours.
    
    To raise the quality of preschool education, the Education Ministry mandated that from 2009, those who want to teach in childcare centres and kindergartens must have at least five 0-level passes, including a credit in English. They also need a diploma in preschool teaching.
    
    Existing teachers have until 2013 to obtain an 0-level credit in English or pass an English proficiency test, and get the diploma.
    
    With higher qualifications required, childcare teachers are demanding higher salaries. And with the rapidly expanding industry - last year alone, 141 new centres opened - childcare teachers are now in short supply.
    
    It has left operators scrambling to attract and retain teachers with bigger pay cheques.
    
    Just take PCF Sparkletots and My First Skool - two of the largest players in the industry. Both run dozens of centres.
    
    PCF Sparkletots, run by the PAP Community Foundation, opened 24 centres in the past year alone. And by the end of this year, it aims to almost double its size from its current 58 centres to 92 islandwide.
    
    With an average of eight teachers per centre, it will have to hire at least 272 teachers this year.
    
    NTUC First Campus' My First Skool opened 32 centres over the past three years and now has 72. Over that period, teacher strength expanded from 119 in 2007 to 750 now.
    
    This year it plans to open another 10 centres and hire at least 60 childcare teachers.
    
    In 2007, its starting pay for a teacher with a diploma in early childhood education was $1,400. Now it is $1,800 - almost 30 per cent more.
    
    Salaries are expected to continue rising, with at least 75 more new centres expected by 2013, according to MCYS projections.
    
    The ministry has assured parents repeatedly that more centres will mean more choices and keep fees affordable.
    
    In August 2008, Prime Minister Lee Hsien Loong announced the Government would double the childcare subsidy for working mothers from $150 to $300 a child per month.
    
    In February 2009, MCYS Minister Vivian Balakrishnan urged childcare centres to hold off fee increases during the downturn.
    
    He told Parliament that in just about six months since the start of the increased subsidy, 18 per cent of childcare centres had either increased fees or were planning to do so.
    
    The ministry does not regulate fees as such centres are privately run. But under its guidelines, centres have to notify parents of changes at least two months before fees go up.
    
    All 10 operators interviewed raised their fees in the past three years, blaming higher staff salaries andrentals.
    
    Mrs Alexis Nielsen, 47, who runs Rainbow Cove Preschool in Upper East Coast Road, said her rental went up by 100 per cent in 2008. With staff costs rising, she raised her full-day monthly fee from $800 to $1,000 this month.
    
    'This is my first fee increase in four years,' she said. 'I did not raise fees in 2008 and 2009, even though many operators did so.'
    
    And even the industry's big boys have not escaped rising rentals.
    
    Pat's Schoolhouse, an upmarket brand with 13 branches, said its rentals rose by up to 50 per cent at some locations in the past three years.
    
    Last year, it raised half-day fees from $850 to $900. This year, full-day fees went up from $1,275 to $1,375.
    
    Salaries have also risen because more graduates have joined the industry. For example, Pat's Schoolhouse has close to 300 teachers and at least half of them are graduates.
    
    Aside from rentals and salaries, everything from food to education materials costs more now, said Dr Lim Teck Huat, chief operating officer at the PAP Community Foundation.
    
    Since last year, nine PCF Sparkletots centres raised fees by between about $30 and $65 a month. Full-day nursery fees now range from $428 to $588.50.
    
    At My First Skool, fees have increased twice since 2008 - by about 4 per cent each time - as its teachers' salaries have risen by 28 per cent since 2007. It now charges an average of $580 a month for its full-day programme.
    
    Mr Francis Ng, 47, founder of Carpe Diem Holdings, which runs 20 childcare centres, used to give parents a guarantee that a child would pay the same fee throughout his stay at the centre.
    
    Given the rising costs, he has scrapped the price guarantee for new pupils at the Carpe Diem Schoolhouse which he runs in Jurong Kechil. He will let his franchisees, who run the group's other centres, decide whether to continue offering the guarantee.
    
    Ten years ago, he said he charged $590 a month for a full-day programme at his Jurong Kechil centre. Now the fee is $745 - a 26 per cent increase.
    
    In that time, he says, teachers' salaries doubled, while his rental went up by 70 per cent.
    
    The only winners appear to be childcare teachers, who now can pick and choose who to work for.
    
    Ms Fiona Walker, 42, Chiltern House's principal director, said: 'You place an ad for teachers, people (call and) say they are coming, but they don't show up for the interview.
    
    'We've seen a definite increase in such no-shows in the past three years. We also see a definite increase in people trying to poach our staff.'
    
    Salaries at Chiltern House, another upmarket centre which is part of the Julia Gabriel Group, have risen about 21 per cent since 2009 and rentals have shot up too. It has raised fees four times since 2007.
    
    Its latest fee hike was this year, a 10 per cent increase. Now, it charges between $925 and $1,000 for its half-day programme at its five centres.
    
    extracted from cna forum
• elindra

  17 Feb 11, 09:37

  It's very expensive

  Those full day infant care is even worse starting from S$1,500 a month

• dragg

  17 Feb 11, 09:42

  more and more child care centres can only mean this industry is very lucrative.

  but why are prices going higher and higher instead of dropping due to competition?

   

• elindra

  17 Feb 11, 09:45

  Originally posted by dragg:

  more and more child care centres can only mean this industry is very lucrative.

  but why are prices going higher and higher instead of dropping due to competition?

   

  
  The article already addressed it

  Higher rental cost due to the property boom (this one is very true)

  Also salary of teachers going up. No one wants some FT to teach their kids in some weird accent so they have to pay more for better educated and qualified teachers too

  Although the Government is complaining that there are not enough children it's likely the demand still exceeds supply since practically everyone is a working mother these days

• dragg

  17 Feb 11, 09:51

  Originally posted by elindra:

  
  The article already addressed it

  Higher rental cost due to the property boom (this one is very true)

  Also salary of teachers going up. No one wants some FT to teach their kids in some weird accent so they have to pay more for better educated and qualified teachers too

  Although the Government is complaining that there are not enough children it's likely the demand still exceeds supply since practically everyone is a working mother these days

  i have no kids so i have no idea.

  is it true there are no FTs at child care centres?

   

• elindra

  17 Feb 11, 09:56

  I have no kids too le. Last time I know there are PRCs. Now I dunno I think need to ask my friend working in child care.

  But I know a bit coz I think my hubby and I also not getting younger la and checking things out.

  We look at the costs we are already -_-“

  Not that cannot afford it but it does put a crimp on our lifestyle

  So damn ex lor

• FireIce

  17 Feb 11, 12:24

  tts why birth rate down and down.