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Early learning centres set to dip into reserves to survive

Fuseworks Media
Fuseworks Media

A survey of Early Childhood Council members reveals 45% of centres are set use their own resources - if they have any available - before increasing fees for parents to survive the COVID-19 crisis.

While 26% of centres said they’d consider raising fees for parents, many were reluctant to ask their community for more in a recession, commenting:

- "As a community owned centre we have no options and are planning closure"

- "Parent fees are already too high. We have no reserves left. We will likely be faced with closure of our centre"

- "We already are struggling financially with very meagre trading surpluses and very little

room to increase fees. Very dependent on equity and targeted funding. Desperately need

more funding from somewhere."

"The pressure has been on community and privately-owned centres for some time, and the fear is it’s only going to get worse. Only 19% of our members surveyed were able to access the wage subsidy extension under the 40% revenue drop threshold," said Early Childhood Education CEO Peter Reynolds.

"With 44% of centres saying the cost of recent teacher wage increases aren’t covered by an increased subsidy, many are in a tough spot."

Only 26% of centres surveyed said they’d applied for the government’s Urgent Response Fund, with only 3% of those successfully accessing funding so far.

"The wage subsidy is undersubscribed and the URF proving hard to unlock, with reports of an opaque process and little guidance from the Ministry. The money is there to help, surely more can be done to target available resources where it’s needed, without putting the burden on their depleted reserves, or on parents," said Mr Reynolds.

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