More cost of living woes if preschool fee increases go through

Preschooling at People’s Action Party Community Foundation (PCF) kindergartens and childcare centres are expected to get more expensive if some branches go ahead with their announced intention to increase their fees to help cover their cost of operations.

According to the PCF, a branch may consider increasing its fees with justifications such as a new curricula or special programmes. However, more pointedly, the need to increase fees is based on the branch’s finances, as revealed by a PCF spokesperson in a reply to the media.

This comes less than three months after Prime Minister Lee Hsien Loong had pledged to keep fees low while maintaining a good-quality preschool programme. PM Lee was then addressing parents at the 25^th anniversary of the PCF where he said that in addition to better-qualified teachers and principals, PCF kindergartens are improving their curriculum and introducing more niche programmes and “all this while keeping fees affordable so that we can continue to meet the needs of many families in Singapore”.

Given that PM Lee had pledged to keep fees affordable, I am baffled why some three months later, the PAP Members of Parliament (MP) of PCF branches where fee increases are being considered have changed the narrative to one of sustainability and are looking to pass on the increase in their cost of operations to parents. Why should the burden of ensuring the sustainability of a PCF branch be passed onto parents, when the onus on proper financial management should rest with the management team of the branch?

This sustainability approach also seems at odds with the PCF’s mission to enhance the well-being of the community through educational, welfare and community services, and its vision of providing quality services at affordable cost to the community.

If the PCF is meant to be the social and charitable arm of the PAP, why then are its branches operating as though they are separate business entities that are charged to earn their own upkeep? Given that improvements are being introduced to continue providing quality preschool education, shouldn’t the foundation be reviewing its funding model for its branches to ensure sufficiency of operating and development funding thereby guaranteeing the sustainability of the branches instead of having the branches recover the cost from parents, some of whom can barely afford to send their children to PCF kindergartens?

The PCF is, after all, an organization that has more than $17 million in cash and deposits, and with its ratio of reserves to annual operating expenditure at 5.25: 1 (based on its financial statements as of end 2009), I am sure the PCF should have no difficulty meeting the increased operating expenditure of its branches, especially if such increases are primarily due to increases in staff salaries and the introduction of special programmes.

Well, the PCF may argue that the ratio has been declining over time due to the need to draw down on the reserves to meeting operating costs, raising concerns that this continuing trend may deplete the PCF’s reserves in the longer term.

If this is a real concern for the PCF and a possible driver for increasing fees, then the onus should lie with the MPs associated with each branch to do more to generate more donations from the community they serve. Such donations could be channelled to the PCF and would ultimately translate into gains for the community’s PCF branches. Such a community-based approach would be far better than having parents add on to their cost of living woes.

Better yet, why not have all ministers pledge a portion of their multi-million dollar annual salaries to the PCF to bolster its cash reserves?

Furthermore, as the largest preschool education operator in Singapore, with about six in 10 preschoolers attending its programme in 240 kindergartens and 65 childcare centres across 87 branches, shouldn’t the PCF be able to benefit from the economies of scale that come from being part of such a monolithic organization?

The announced intent of some branches to raise fees, citing operations cost as a key driver for the increase in fees, seems to suggest that each PCF branch is moving on its own, without any support or guidance from the centre.

The questions raised above and many more are probably running through the minds of parents who expect to be impacted by the proposed fee increase – sooner or later. Even with fees pegged from $90 to $120 per month as of August 2010, some families have already had to seek financial assistance to give their children a headstart in education.

With the anticipated increase in fees, I would expect the number of parents applying for aid through the government’s Kindergarten Financial Assistance Scheme as well as the PCF’s Headstart fund to increase, to include possibly even families in the lower-end of the middle-income bracket who are struggling with cost of living issues.

And if the government and, by extension, the PAP, is to live up to its mantra of not denying any child the opportunity of an education due to cost considerations, it would have to ensure that all, if not most, applications for financial aid are approved. Anything less of the desired result would be seen as a failure of the social compact that the government had promised for the future of our children.

If we are to be convinced that the government continues to be invested in education as a leveler in society and that it is the “best way to uplift the lives of our people”, the way forward is definitely not by passing the buck to parents.

More can and needs to be done for preschool education, and the government and the PCF have a big part to play in this regard.

Endnote: The last fees increase was effected in 2008 by 50-plus PCF branches, citing rising operating costs. If we simply accept this rationale, then like everything else in Singapore, we may very well see preschool fees increasing on a regular cycle. I, for one, am not for that.