What is Family Day Care?
Family Day Care (FDC) is a home-based early education childcare service that offers families a flexible home learning environment.
The service is provided by individual educators who are self-employed and operate as small businesses, caring for children inside their homes. Council does not employ educators or operate centres.
- What is Shoalhaven Family Day Care (SFDC)?
SFDC is a coordination service Council has been providing since 1980.
There are five people employed by Council in the SFDC unit, to fill 3.6 FTE positions, who administer and support the 23 self-employed educators run their own businesses.
SFDC assists educators with the administration required to comply with the NSW and Australian regulations, standards, policies and procedures to operate their businesses.
- Why is Council moving away from SFDC?
The cost to provide the administration and regulation coordination by Council has dramatically increased during the last five years and is projected to continue to increase under changes to government funding and regulations.
A review by Council has identified other not-for-profit operators who are willing and able to support any Shoalhaven educators that wish to transition to their organisation – meaning minimal disruption to the service. There is also potential for current employees to work with those providers, if they wish.
SFDC has moved from making a profit in 2019-20, to losing between $68,000 to $96,000 each year.
Despite significant efforts to grow, SFDC has struggled to recruit the number of educators required to break even.
- What does Council’s decision to transition out of SFDC mean for local educators and families?
Council is committed to making any transition process a positive one for both educators and their families and will support them throughout.
During a transition, educators would be able to continue to operate and Council would keep coordinating the SFDC service and supporting educators as they transition to a new service provider.
To prevent additional costs for families and educators during the transition, families wouldn’t be charged the annual enrolment fee, and educators would be reimbursed for changing any existing SFDC signage. Where families have already paid their enrolment fee Council would arrange for a refund.
- If Council did transition the service, what would it mean for the staff affected?
The organisation has started discussions with the affected team members about the potential changes to SFDC and would support them through the transition process.
If staff wish to transition to another provider, where the opportunity exists, they would be supported to do so. Human Resources would also work with the FDC team to identify opportunities within Council for those interested in being re-deployed.
The team have access to free, confidential counselling and support through the Employee Assistance Program (EAP).
- Could staff be redirected or re-skilled internally, rather than lose their job?
SFDC staff are specialists in delivering FDC services and if they wish to transition to another provider, they would be supported to do so. There may be opportunities for some positions to be deployed within Council to other teams. Council’s Human
Human Resources team would work with the FDC team to identify opportunities within Council for those interested in being re-deployed.
- What happens if potential providers are at capacity? There are already long wait lists for childcare.
FDC is a home-based early education childcare service that offers families a flexible learning environment. The service is provided by individual educators who are self-employed and operate as small businesses, caring for children in their homes. The Council does not employ educators or operate centres.
FDC providers assist educators with the administration required to comply with NSW and Australian regulations, standards, policies, and procedures. Providers work based on coordination ratios, meaning they need a certain number of coordination staff to support the active educators.
Providers employ the necessary coordination staff to match the number of educators they have. The number of individual FDC services depends on the number of independent business owners. The only limiting factor is the number of educators, as they run their own businesses, which depends on how many people are interested in starting their own FDC business. Providers will employ coordination staff accordingly.
SFDC currently has a waitlist of families but has been unable to recruit enough educators to start additional businesses to accommodate these families. They are currently above the required coordination ratio, meaning they are well-equipped and able to support more educators.
- If SFDC educators move to another service provider, can they guarantee that a child's current provider will remain the same and at the same cost?
Educators can choose a provider to move their business to, and as independent business operators, they will take their FDC (and the children they care for) with them. The providers simply assist educators with the administration required to comply with NSW and Australian regulations, standards, policies, and procedures.
Each provider will have a slightly different fee structure. The advice we have received is that this change should be minimal. Fees and charges with other service providers are comparable to those provided by SFDC. Some services are marginally cheaper, while others are slightly more. Each provider operates slightly differently, such as combining the parent and educator levies into one payment while others keep these separate.
Council will facilitate opportunities for educators to meet with alternative services to ensure they have enough information to make an informed decision about which service to sign up with. Children's educators will not change unless the educator themselves decides to no longer deliver FDC from their home.
- How will Council ensure a smooth transition for parents and children with potential new providers to avoid disruption and extra cost?
SFDC will remain operational and assist educators with the transition until the last educator is placed with another service. Council staff will support the transition to ensure that there is minimal disruption to educators and families.
Registering with another provider will mean that educators are still able to operate a service from their family home and children will be cared for in the same location by the same educator.
Educators will choose which provider they wish to transition their business to.
- Given that Council has identified six childcare 'deserts' within the LGA how can they then justify closing a service when there is a high demand for childcare?
Council is seeking to transition the current level of service to new providers, the aim is to do this so the service can continue to operate and support community’s childcare needs.
- Given that shires such as Eurobodalla can offer a FDC service, why can't Shoalhaven?
Over the past five years, the Council has undertaken various activities to recruit new educators and expand SFDC. However, these efforts have not resulted in the recruitment of new educators. Community needs are unique to each government area, and while there may be an overall demand for childcare, the challenge lies in recruiting educators to run their independent businesses within the FDC model here in the Shoalhaven.
Shoalhaven City Council (SCC) is not alone in facing these challenges. In recent years, Wingecarribee and Kiama councils have also exited their services, with educators transitioning to other providers.
- How will Council monitor the safety of vulnerable children in future care?
This responsibility lies with the Department of Education and the service provider.
FDC providers assist FDC businesses with the administration required to comply with NSW and Australian regulations, standards, policies, and procedures.
- Has Council applied for a Child Care Fee Assistance Federal Government subsidy as they seem to have received in the past?
This funding is the Child Care Subsidy and is provided to families to subsidise the cost of care this is not funding source available to FDC providers.
- What has happened to the business model since 2018/19, given that current providers and parents already pay a fee for this service?
Council received funding from the Community Child Care Fund (CCCF) during this period. Council was advised that this funding would cease in 2020 and that funding levels would reduce year-on-year so that in 2020/2021 Council would not receive funding.
In 2018/19 Council received $112,390 in federal funding to support the service. This reduced to $82,610 in 2019/20 and $68,725 in 2020/21 and was $0 beyond this.
A review of SFDC fees and charges was undertaken to increase income. Due to COVID 19 however, the Dept of Education mandated a fee freeze on all FDC services, so we were not able to commence with implementing the new fees until 2022. The revised fee structure improved the financial position of SFDC however due to the impacts of bushfires and COVID, the service lost Educator numbers and have not been able to recover these numbers to pre-pandemic levels despite considerable efforts to do so.
- Are there other options Council could have considered to continue running the SFDC service?
While the service review recommended Council transition educators to another provider to assist in improving the financial position, other options considered, were:
- What did Council do to try and grow the service?
Over the past 5 years, Council has undertaken a range of recruitment activities. The activities included promotion for the recruitment of FDC educators by:
In addition, the Coordination Unit:
- Has Council considered expanding providers to people such as single and partnered stay-at-home mums who are willing to take on this role? Has this been costed?
SFDC welcomes anyone with the appropriate qualifications and willingness to provide a FDC service in their home to become an educator.
- Has Council looked into the current trend of more educators being trained and coming online in the next 1-2 years that may ease the issue with recruiting educators?
Yes, the Council has looked into the current trend of more educators being trained and coming online in the next 1-2 years, which may help ease the issue of recruiting educators. Over the past five years, the Council has undertaken various activities to recruit new educators and expand SFDC. However, these efforts have not resulted in the recruitment of new educators.
One of the main challenges is that there are more barriers than incentives for setting up FDC services. These barriers include stringent compliance requirements, the need for significant administrative support, and the complexities of running an independent business from home. Despite the overall demand for childcare, these challenges have made it difficult to attract new educators to the FDC model.
- What is the Council's commitment to providing care for all residents, including our youngest and most vulnerable? How can Council discontinue this long-standing, trusted, and valued service based solely on financial considerations, without considering its long-term value to the community and ratepayers?
Council is committed to providing the highest level of care to our community through the range of services we deliver. To meet this commitment, it is sometimes necessary to make difficult decisions. In some cases, it is better to reduce the breadth of services to ensure that the desired standards are met within the resources available to us.
Part of our commitment to delivering excellent services includes transitioning away from certain services. However, throughout this process, Council is dedicated to supporting educators in finding the best-suited providers for their service. Council will assist them through the transition to ensure minimal disruption to their current service and provide the best ongoing support available.
- Is it possible to defer the decision to consider further options and adequate consultation with users of the service, how can we be assured that Councillors have had adequate time to fully consider this vital issue?
Councillors have been kept well-informed of the situation through briefings and workshops and have had considerable time to consider the matter. There is a Notice of Motion for this evening's meeting to discuss broader community engagement on this issue.
- Did any of these actions occur prior to the receipt of the rescission motion on 21/2?
Email communication has been sent out to SFDC team, educators and families to inform them of the resolution and subsequent rescission motion. As the original resolution is on hold, any work on the transition has now been suspended until such time as the rescission motion is discussed on the floor of Council.
- Will the service be transitioned to a not-for-profit or private provider?
Council would assist the self-employed educators to transition to any service provider they wish.
As part of the service review, staff consulted with not-for-profit providers, including Illawarra FDC who expressed willingness to take on SFDC educators.
There may also be employment opportunities for some of the existing SFDC staff with these providers.
- When would the transition occur and what is the timeframe? Did any actions occur prior to the receipt of the rescission motion?
SFDC team, educators and families have received communication to inform them of the resolution and subsequent rescission motion.
As the original resolution from the 18 February meeting is currently on hold while Council considers the rescission motion and at this stage, it is scheduled for discussion at the Council meeting on Tuesday, 11 March 2025 until this has happened the work to transition away from SFDC has been suspended.
- Why did Council decline federal funding assistance to subsidise the service in 2024?
In 2024, Council was offered funding of $40,000 for 2025 and $40,000 for 2026. This funding was contingent on Council growing the business and at the time, the service was under review.
Given the circumstances, accepting the funding would have been contrary to the terms of the funding agreement.
While the grant would have provided a 2-year partial reduction in the annual operating deficit for SFDC, it would not have resolved the long-term financial sustainability of the service.
- How much would it cost Council to transition out of providing this service?
It is estimated that there would be a cost for this transition which will include staff time to close down the service, refund enrolment fees, pay out staff entitlements, staff wellbeing support and costs associated with transitioning educators to new providers. This is dependent on a several factors and will be known after finalisation of the resolution and next steps. This will be published at such time as the final figure is confirmed. While there is a cost for the transition, the ongoing benefit to general fund is approximately $90,000 annually.
- Why did educators and families only find out about this a few days before the meeting?
A review of the service is based on the financial analysis and business forecasts of the operation. Educators were invited to a meeting prior to the Council report made public to afford them the opportunity to ask questions and hear the information directly from staff. The service review considered that there would be minimal impact to the educators and their families, under any of the recommendations to Council. Once a decision was made by Council, staff could then implement those changes and consult with educators through any transition.