Malta has set up a waiting list for new childcare centres who have been frozen out of the government’s free childcare scheme, in the eventuality that the scheme reopens.
Investors have been told to submit their personal details, including the stage the new childcare centre is currently at and its estimated capacity. If the government eventually lifts the freeze, the waiting list will be prioritised according to the date of the certificate of Temporary Registration issued by the Directorate for Quality and Standards in Education.
Lovin Malta revealed last month that the government has suspended its free childcare scheme for new childcare centres until further notice as a cost-cutting exercise.
Finance Minister Clyde Caruana said this suspension was due to a decline in demand for childcare since the COVID-19 pandemic hit.
He’s argued that since the government is still paying childcare centres the same rate they were receiving in March 2020 regardless of how many children attend, any extension of the free childcare subsidy to new centres will just represent an extra cost.
However, the lack of prior communication has left investors of new childcare centres limbo, who will now have to either charge parents for childcare, hope for an exemption or freeze their new businesses until further notice, despite the financial toil.
Naturally, a childcare centre charging for its services among several centres offering free childcare would be extremely uncompetitive.
“First they opened the doors and then literally shut them without any help and tell you that you will be added to a waiting list leaving us all full of uncertainties!” an investor told Lovin Malta “This is truly a shock for us investors in this sector.”
“Something has to be done to those who have heavily invested and are already undergoing the works. Prior notice in such cases is a MUST!”
Another one said she hasn’t spotted a lack of demand at all in the centres she currently manages and that she’s even had to turn parents away because spaces, limited by COVID-19 regulations, were full up.
“If other centers have problems filling up their spaces I think the problems are different. It’s not due to a decrease in demand but possibly in quality,” she postulated.
In fact, she argued that competition in the industry is healthy to encourage childcare centres to improve their quality of care and that more childcare centres might end up forcing the poor quality ones out of the market.
Another investor, who had first flagged the issue, questioned how he’ll be able to repay his bank loan, along with rent, electricity, staff training and other costs.
Introduced under the administration of former Prime Minister Joseph Muscat, free childcare has been widely credited as one of the Labour government’s major economic incentives.
The scheme opened up the job market to more mothers, allowing them to go to work without the burden of childcare costs.
It’s also become more and more expensive for the public purse, with costs gradually rising from €10 million in 2015 to €26.45 million in 2019.
Cover photo: Education Ministry permanent secretary Frank Fabri (left) and former Education Minister Owen Bonnici (right) visiting a childcare centre last May. Photo: DOI
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