At the end of the debate, everyone in the meeting room breathes a sigh of relief. It’s done, the child and youth welfare committee has unanimously decided on a hardship regulation that is intended to help ensure that all daycare places in Munich are retained. The providers of daycare centers who have economic problems can submit a corresponding application and then receive the necessary amount of help from the city. This is particularly true of daycare centers that are subsidized by the Munich funding formula and cannot compensate for increased costs for staff and rent, for example.
“This is an important decision for the daycare providers,” says Julia Sterzer, managing director of Awo Munich. “There was great concern that things would be very tight financially this year.” Awo operates 36 daycare centers in Munich, which are subsidized through the Munich funding formula and are therefore affected by the problem. “When you talk, everyone wants the same thing, namely that no one gets into trouble,” says Lena Odell (SPD), spokeswoman for the Child and Youth Welfare Committee.
The committee had previously discussed it for one and a half hours; about the right time to use auditors and about application deadlines, billing modalities and deficits. Funding daycare centers is a complex topic, but the message at the end is simple: The city wants to financially support the providers of Munich daycare centers so that no daycare place is lost.
The providers have been complaining for a long time about sharply increased costs for rent, staff and additional costs, but – at least if they are subsidized via the Munich funding formula – they are not allowed to simply increase parental contributions to compensate for the higher costs. And the city’s compensation payments, which were introduced in September 2019 to enable significantly lower parental fees, have not been increased since then. This affects 622 independent daycare centers. There are a total of around 1,500 daycare centers in Munich, of which the city operates around 460.
The fact that the compensation payments were not increased is – as the education department has repeatedly justified – also due to the ruling of the Munich Administrative Court, which in September 2021, following a lawsuit from a private daycare provider, classified the city’s daycare funding as unlawful . Since then, the city has been working on a new funding model.
A new funding model will apply from September
Because the affected daycare providers have no way of compensating for the cost increases of the past few years, they are threatened with economic difficulties, according to the education department’s draft resolution for the hardship regulation. “There is therefore a risk that urgently needed care places in Munich will no longer be available.” This should now be prevented with the hardship regulation. In this case, it is only about the next eight months; from September 1, 2024, a new funding model will apply, which will replace Munich’s previous funding concept, the Munich funding formula.
It is unclear how many daycare providers will apply for hardship assistance. The education department reports that it is not possible to predict how many providers will apply and how much aid will be requested. “There will be some who will have to apply for this help,” says Awo managing director Sterzer, assessing the situation. It is difficult to make a financial forecast about the daycare budget because there are so many fluctuations over the course of a year: the staffing situation changes, opening hours may have to be reduced or new children may be admitted. If in doubt, says Julia Sterzer, Awo will apply for hardship assistance and withdraw the application if the help is not needed.
The hardship regulation will also be a topic in the Education Committee on Wednesday.