Michael Taft
LONG-TIME socialist, union activist and Siptu researcher Michael Taft can hardly be accused of being soft on the ‘right-of-centre’ FFG-led Government. So given the recent ‘strike’ of some childcare providers demanding extra Government subsidies, Taft’s attack on their rising “profits, dividends and directors’ remunerations” is an interesting take compared to the soft ride the media has given the ‘employers’ in this sector. It is also a reminder to Ivana Bacik of what the Labour Party used to sound like when it had a vibrant, left-wing grouping led by people such as former member Taft.
Writing in his blog, Notes On The Front, Taft says that a Siptu survey of the accounts of select childcare companies tells a far different story to that of many such companies. His blog says: “Profits, dividends and directors’ remuneration all rising, while providers amassed larger amounts of cash thanks largely to public subsidies.”
He concedes that some companies are struggling but says they are in a minority and are not spread across the entire sector. The crisis in the sector is “not that private providers aren’t getting enough subsidies; it is that the current ownership structure of the sector (largely privately owned) is incapable of providing affordable childcare, proper wages and services accessible throughout the country, in a fiscally efficient manner”.
Ivana Bacik
Michael Taft analyses Ireland’s largest childcare network, Giraffe, whose financial accounts only go up to 2020 and is over a year late in filing its 2021 accounts. The union man goes on to point out some interesting Giraffe stats: “In 2020, profits rose by 61 percent, to nearly €3.5 million. The company more than doubled their cash holdings – to over €5 million.
“In 2019, the company paid €6.5 million in dividends to their owners. Though the amount paid in 2020 was reduced, nearly €1.7 million was paid. In that year, the company received €6.7 million in public subsidies through the Temporary Wage Subsidy Scheme. In effect, the subsidy helped pay the dividend.”
Moving to small and medium-sized childcare companies (Links, Cocoon, Grovelands, Little Rainbows, Safari and Tiger), Michael Taft writes: “Between 2019 – the year before Covid – and 2021: Combined profits for the six companies increased nearly 7-fold, to €6.9 million (though a large chunk of that was due to one company: Links). Combined cash holdings increased by over 3-fold, to €9.1 million. Directors’ remuneration (another vehicle to extract value from a company) increased by two-fold, to €2.4 million.”
His polemic also argues that the real issues in this sector include the lack of transparency, whereby the private childcare companies hide behind reporting exemptions to withhold information. But mainly it is the ownership structure that sees almost two-thirds of such companies in the private sector.
“An additional €400 million has gone into the sector and yet thousands of workers are on low wages and are not being adequately compensated for professionalisation of the workforce,” he writes.
“Maybe we are seeing prosperous, profitable companies exploiting the difficulties that some providers are experiencing; exploiting so that they can get more public subsidies and add to their profit line.”
Taft’s own employer, Siptu, it should be said, is currently in serious dispute with childcare employers over low wages of their members although, unlike some of the employers, they have yet to go on strike.
