NSW council withdraws as FDC licensee citing “declining service model”, funding cuts

NSW council withdraws as FDC licensee citing “declining service model”, funding cuts

by Freya Lucas

May 13, 2020

A New South Wales regional council determined earlier this week that they would withdraw their role as licensee of family day care (FDC) services, effective next financial year, because of “a combination of reasons” including the withdrawal of Federal Government funding over past years and “ the declining service model”.

 

Wagga Wagga City Council said the impact of COVID-19 has also contributed to Council taking this position as an approved FDC licensee, with Council General Manager Peter Thompson saying four staff members will be affected, and Council is working closely with those staff members on redeployment and redundancy options.

 

An independent service review for Council’s involvement in FDC was completed in March 2020, just before the effects of COVID-19 affected Wagga, Mr Thompson said.

 

The review focused on the business operations and the financial position of the service moving forward, he added, and was undertaken due to “the decline in educator and family numbers” in Wagga, which was impacted  by the increase in alternative education and care market offerings in the area, and fee price sensitivity. 

 

A shortfall in expected revenue then occurred due to the declining numbers of families using the service, which, when coupled with the cumulative impact of the withdrawal of the Federal operations grant subsidy, and increasing costs in legislative compliance requirements drove the Council to review their position, Mr Thompson said.

 

“Over the years, Council has been operating the service based on grants and fees and charges. The service review identified that the FDC service was financially unsustainable due to the reasons just mentioned,” he added, saying that while COVID-19 has “not been a primary driver” of the decision, it has severely impacted on the service and on some FDC businesses ceasing to operate during COVID-19.

 

Mr Thompson said Council staff will be providing information and support to FDC business operators to transition their registration to another licensee in the region or State if they wish to continue their business.

 

Options for educators in Wagga may include being registered under licensed providers in Junee, Hume Billabong or Albury. The decision of Council does not restrict their ability to continue to provide their service in the Wagga region.

 

Mr Thompson recognised the role Council has played in providing the Wagga Wagga community with childcare services.

 

“We trust that our community understands this difficult decision and that despite declining numbers in recent years, FDC in Wagga has delivered and provided excellent childcare services,” he said.

 

“I take this opportunity to thank all those involved over that time for their contribution and care services to our community.”

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