One in five childcare centres will raise childcare fees for full-day programmes in 2020. This will affect some 330 centres.
Singapore parents are naturally concerned, with some pointing out that it comes shortly after additional childcare subsidies were announced last month.
The monthly income ceiling for families to qualify for additional childcare subsidies was raised from $7,500 to $12,000. The quantum of additional subsidies was also raised, with more for those earning less.
The Early Childhood Development Agency (ECDA) said that 330 childcare centres would be increasing their full-day fees for Singapore citizens from next year. The median increase is “within 5 per cent of fees” and “broadly comparable” with previous years, it added.
Most centres informed ECDA before subsidies announced
Also, a large majority of the centres had informed ECDA of their planned hike for next year before the enhanced subsidies were announced on Aug 28. The rest did so before ECDA’s Sept 1 deadline.
In 2019, 220 centres raised fees and in 2018, 540 did so.
Centres have to inform ECDA of fee revisions and give parents at least four months’ notice before they kick in. Said the agency: “Most preschools seek to ensure that their fee increases, which are needed to keep pace with costs, are not excessive in order to remain competitive and attractive to parents.”
Which childcare centres are raising fees in 2020
The two biggest preschool operators are increasing childcare fees in 2020 in some centres that are charging less than others. PAP Community Foundation’s (PCF) Sparkletots and NTUC First Campus’ My First Skool have about 500 centres between them,
So is Star Learners, a partner operator with 35 centres under the scheme.
Anchor and partner operators get government funding to keep fees low, and have a fee cap to adhere to.
PCF corporate affairs manager Samuel Ng said the changes will affect only “a few centres” operating “well below” the fee cap. The increase is within 5 per cent of fees, and parents were told in July.
A My First Skool spokesman said it is “making slight fee adjustments at some remaining centres to progressively standardise our fees across the network”, bringing fees to $720 – the cap before GST for anchor operators.
A Star Learners spokesman said it reviews fees annually to defray rising operating costs and continue providing quality childcare and education. It takes into consideration factors such as location and rental costs and staff salaries.
She said the fee increase, ranging between $20 and $90, would impact 4 per cent of about 3,000 children enrolled. Parents were notified on Sept 1, and the hike was “not planned to coincide with any government announcements”.
Partner operator PPIS will raise fees by 5 per cent. It said they would still be under the cap and the hike will help it continue to enhance its curriculum and benefit children at its centres.
These centres will keep fees at the same rate
Partner operator Carpe Diem said its 24 pre-schools under the scheme would not raise fees as they were at the cap, while Safari House said all its pre-schools, including 11 under the partner operator scheme, would not increase fees even as staff and property costs go up.
Private preschool Chiltern House said it was not increasing school fees as it had done so last year, and did not want to do so every year, despite rising costs such as rent and salaries.
Parents unhappy about the increase in childcare fees
The extension of additional subsidies means 30,000 more families benefit. Those with household incomes between $10,501 and $12,000 get an extra $80 on top of the basic $300 subsidy for working mothers, with more for those in lower income brackets.
One couple who now qualify for the additional subsidy were glad they could save $80. But they were shocked when, a week after the announcement, they received a letter from their three-year-old daughter’s private pre-school in Marsiling saying fees will increase by about $40 from January. Sales manager Edrick, 43, who gave only his first name, said: “Nothing much has changed.”
He added that the school told parents the increment would go to further training for the teachers, as well as learning materials and other benefits for the children.
For Madam Teoh, 32, this is the second consecutive year of a $50 fee increase for her three-year-old son at a My Little Campus pre-school. “I can’t do anything about it. If I withdraw my son, we have to wait to get into another pre-school and he will have to adapt again,” said the project engineer who declined to give her full name.
ECDA expects median fees to drop later
Mr Desmond Choo, MP for Tampines GRC, had asked in Parliament this month about guarding against undue fee increases that counter the effectiveness of subsidies. Yesterday, he told The Straits Times: “Regular fee increases are normal in a sustainable and professional early childcare education industry as we need to pay our teachers more and get better teaching materials. However, we must always guard against profiteering.”
“A good way to guard against undue increases is to get centres to be more transparent with how fee increases are being used. I hope we continue to be hawkish in watching the next round of increases,” he added.
National University of Singapore economics lecturer Kelvin Seah said it is not unusual to observe firms increasing prices after a subsidy is given. “The rising fees are likely driven by a combination of cost reasons and changing market demand,” he said, citing rising rental costs, staff remuneration, and inflation.
However, ECDA expects median fees to go down in the coming years. It noted the median fee for full-day childcare for Singaporeans has been maintained at $800 per month before GST, the fee cap for partner operators, since 2016. “Increasingly, with the expansion of government-supported preschools, the Government will also look to lower their fee caps over the medium term, starting with partner operators in 2021,” it added.
A version of this article first appeared in The Straits Times.