A Pictorial Description of a Typical Daycare Centre in Finland

The following is an article contributed by a Singaporean parent with a preschooler living in Finland.

There has been much debate recently on the quality, quantity and organization of childcare centres in Singapore. Childcare is understandably important for any country and in particular, Singapore. Manpower and specifically talent is Singapore’s best as well as only natural resource (if you do not count our national reserves as one). Undoubtedly, this implies that children are an important factor in the nation’s survival. The role of childcare thus can encourage the national total fertility rate (TFR) to a certain extent; put existing parents at ease and better prepare children for a fiercely competitive globalised world.

Finland was ranked first in the world for preschool in recent Economist Intelligence Unit report commissioned by the Lien Foundation. There has been much written about the Finnish education system but what does it really look like from the inside? A picture tells a thousand words so hopefully these pictures give some insight into the Finnish daycare system.

Information privacy and protection are key cornerstones to Finnish individual rights. As such, no recognizable pictures of children can be taken without the permission of the parents in writing. Thus, the following pictures will be strange to viewers since there are hardly or no children in it. Incidentally, the pictures were taken when the children were out playing or in the gym. The pictures were taken from a typical Finnish district daycare centre, i.e. in Singapore’s terms a childcare centre. There are approximately 80 children in this daycare, managed by 16 daycare staff and 1 principal. The centre comprises of two levels. This is the ground level and there is another level below with its own play yard. There is also a kitchen and gym at the lower level.

The daycare opens at 7 every morning and closes at 5 in the evening during the weekdays. This is the front entrance. Incidentally, there is no lock on the front gate, only the main door is locked. The centre is fenced up but is accessible to all, including the outdoor play areas. This means that during the weekends, parents are most welcome to take their kids to the play areas.

Front view of Finnish Daycare Centre

There is a huge playground to the left (for kids aged 4 and above), comprising a junior sized football field, down slopes, a swings area and a “treehouse”. Singaporean parents would not dare let their children anywhere near this “treehouse”. It is almost 4 metres high, with a fireman’s pole and long slide down.

There is another adjoining yard, which is smaller (to the left) for the younger kids (aged 8 months to 3 years). Every Finnish play area always comprises of swings, stairs, slides and most importantly a sand pit. The sand pit is where kids learn to play together and share the toys. All toys for the sand pit are communal. This means that the spades and so forth are kept in a box, which is usually unlocked in the morning. After playing, the kids will return their toys into the box when it is locked in the evening. This is intended to teach them responsibility even for common things that are shared.

Playground area


This is a typical sight as you enter through the main door a Finnish daycare centre. As it is autumn now, Finland experiences monsoon like weather where it rains most days. Kids are not kept indoors because of the rain. They just need “wellies” or boots so that they can go outdoors and keep their feet dry. To the left of the shoe rack is a wash area where boots or raincoats can be washed. The washing is never done by the teachers, always the parents!

Raincoats for a rainy day

The picture below shows the (aged 3 and under) kids’ individual lockers where their extra clothes are stored. Parents ensure that there is always an extra pair of short, trousers, socks, etc. Teachers help with reminders stuck at the top to remind parents of needed items.

Individual lockers for children

Individual lockers for children

Outside the principal’s office

Just opposite the locker area is the principal’s office, which is also used for all other administrative purposes. Just look at the amount of books on the shelves!

Locker area for 4-7 years old

This is the locker area for kids aged 4 to 7. There are no locks, but nothing has ever gone missing! Learning integrity at a young age regardless of status or class is perhaps one reason why Finland is such an egalitarian state.

Notice board

In front of every classroom, the weekly schedule is shown. This includes what the kids are doing each day as well as the menu for the week. Breakfast starts at 8am, lunch at 11am and a snack at 3pm. Other important notices are also put on this board. There is absolutely nothing on this board that is in English so foreigners are expected to learn the language.


On entering the classroom, one is usually surprised at the simplicity of the arrangements. The kids all have their designated seats. They draw, write, paint and eat at the same place. The only instance they are free to roam is when there is free play time. All the materials are neatly stowed away in the corner of the room. The kids all play a part in keeping the classroom tidy with guidance from the teacher.



Materials neatly tucked away

Kids’ Playroom

The above picture shows a play room for the kids. The toys are neatly stowed away in the boxes. Again, the kids do the cleaning up once play time ends. The toys are very typical and normal ones, ranging from puzzles, lego blocks to plastic model cars.

The below picture shows the sleeping are for the kids. According to the daily schedule, the kids have a compulsory “quiet time” from 12 noon to 2pm. Kids who do not fall asleep, are still expected to be silent. For those kids that are uncontrollable, they are usually “escorted” to the play room with a teacher present. No kid has ever been “escorted” more than twice during their lifetime in this daycare.

Sleeping area

A toilet designed and built for kids! All kids in Finland are toilet trained by the time they are 3 years old. The daycare staff together with the parents toilet train the kids with a routine that works like magic. There is hardly any supervision required from age 4 onwards since the kids take their own initiative.

Toilets for kids

Can Singapore replicate this? My opinion is that it will be very difficult. The lack of land space can be addressed. Attitudes, mindsets and cultural norms are high hurdles to clear and cannot be leapt over in one bound. But if there is a will, there will always be a way.

Spike in fees of private childcare operators due to crush for childcare space

The Straits Times carried an article today on “Childcare crush sees rents, fees shoot up” (ST 21 Sep 2012 page A8). The report cited keen competition for limited new childcare centres that has caused rents to spike from $10,000-$20,000 per month five years ago to $30,000 to $40,000 per month in recent tenders. This has translated into rise of monthly childcare fees of hundreds of dollars per child in this period.

The article highlighted perfectly the situation I had presented in parliament last week.

Childcare fees has been rising, fairly rapidly in the recent two years. Rent is a big issue. Since the start of the Anchor Operators scheme in 2010, the number of HDB void deck centres available to private and non-profit operators outside of the Anchor Operator scheme are few. From MCYS’s website, I see around 5 available for each category a year. Each of the two Anchor Operators however, opens around 25 centres a year, for a total of around 50 centres between both. They seem to get their sites from unpublished quotas. Anchor Operators pay $1,000-$2,000 rent per month per centre, based on MCYS’s data of $2-$4 per sqm and typical size of 400-600 sqm.

It is easy to work out the mathematics. A typical childcare centre will have an MCYS approved capacity of 70-100 children, depending on the size of the centre. A centre operating at over $40,000 per month rent will have to charge at least $400 more per child per month compared to an Anchor Operator renting at $1,000 per month. This is based on a maximum enrolment of 100 children. If approved capacity or enrolment is lower than 100 children, they need charge more than $400 in monthly childcare fees just to recoup the cost due to rent differential.

Anchor Operators also get set-up grants (over $100,000 per new centre) and other grants such as for maintenance, learning resources and manpower. MCYS has said recurrent grants (excluding setup and maintenace grants) for Anchor Operators will reach $30 million per year.

Minister of State for MCYS, Mdm Halimah Yacob had stated in her reply to my adjournment motion last week that “we have seen growth in both the Anchor Operator market, as well as growth in the commercial sector”. To her, private operators are not impeded by Anchor Operators.

I will differ on this. The number of HDB void deck sites have become few since this scheme came into being. Operators have to go into commerial properties, which charge higher rents. When a rare new void deck space is made available, existing and aspiring new operators bid unrealistically high prices. They benchmark against commercial properties and may also have been frustrated by earlier unsuccessful bids at lower prices.

This will in turn affect existing centres because when their tenancy is up, HDB will look at market rents and adjust their rental rates accordingly. Recent high bid prices will drive up industry average rental, and cause HDB to increase rental charges.

Right now, there is a shortage of childcare places due to rapidly rising demand. Parents are switching from 3-hour kindergarten programmes or from grandparents’ care into childcare. Many parents have complained to me that they have to wait for more than a year to place their children in an affordable centre. Hence, they have no choice but to enrol with a private operator, despite fees being about $200 more. So there is still sufficient current demand for private operators’ services, despite higher fees due to higher rentals.

MCYS will select another 2-3 Anchor Operators. Anchor Operators will use up almost all the new available void deck centres. When the number of places by Anchor Operators catches up with demand, parents will switch out of private operators due to fees. Private operators will then feel the pinch. Many will close down. They are already operating with tight margins due to rising manpower and rental cost. Indeed, speaking recently with staff at some private centres, they complained of increasingly stressful work situation due to high staff turnover and their companies tightening control of costs. Anchor Operators with recurrent grants for manpower, are in a better position to retain staff and even recruit from other centres. This has caused an outflow of staff from other operators into Anchor Operators in the competition for limited trained staff.

It is a graudal process that is slowly but surely happening. We will be left with only Anchor Operators and high-end premium operators who cater to a different market from Anchor Operators.

The current two Anchor Operators are NTUC First Campus and PCF Sparkletots. They were selected in 2009 based on criteria that included: (a) $5 million paid-up capital, (b) non-profit and (c) non-religion and non-racial. The entire universe of childcare operators in Singapore in 2009 that could have met the criteria may well have been just two operators.

Mdm Halimah Yacob in her reply in parliament stated “The basic entry criteria to the scheme are made known. In addition to development grants and subsidised rental rates, Anchor Operators also receive a recurrent grant to defray the costs of recruiting and developing good quality teachers for their new centres. In other words, whoever wants to take advantage of the Anchor Operator scheme and wants to receive additional grants and support, is entitled to do so. It is open to them, even if you have a commercial entity who feels that it wants to do that, can always set up a non-profit arm. And if they qualify and fulfil the conditions, they are also eligible to become an Anchor Operator and receive the additional support from the Government.”

I find this very strange. What is the purpose of expecting a commercial operator to form a non-profit arm just to be able to enjoy these grants and privileges? It is like stretching your arm around your head to scratch your nose, when you could just scratch your nose directly.

We should be outcome-based, regardless of whether an operator is for-profit or non-profit.

We already know what the two current Anchor Operators can do. They charge around $640 in monthly full-day childcare fees afer receiving all the generous support from the government. If MCYS’s concern is affordability and quality, it can challenge any operator (private or otherwise) who wants to receive similar grants to charge at $640 or lower, while proving they can also run quality operations. As a keen observer and former participant in this industry, I am very confident there will be many players able to do that.

If private operators can do that, it will mean one of two things: either

(a) current anchor non-profit operators are not really non-profit; they make decent surpluses, or

(b) current anchors have not been operating efficiently to bring cost down enough for consumers.

In my parliament speech, I had cited some examples to show why I believe quality private operators are capable of beating the Anchor Operators at their game if offered similar conditions.

Our government seems to have an aversion for giving support to for-profit operators when it comes to childcare. However, when it comes to public transport, they see it fit to pump in billions into infrastructure and bus subsidies for SMRT and Comfort Delgro, both public listed entities. If our government is consistent, shouldn’t these two private transport operators be turned into non-profit operators since it is against our government’s principle to support private companies with grants for their operations?

I also fail to see why the scheme has to be for non-religious and non-racial groups. After all, MOE saw it fit to support schools run by mission groups, buddhist groups and various race-based associations. Is MOE wrong to support education by groups with such affiliations? What’s so special about childcare?

I believe the Anchor Operator scheme is ill-conceived. Granting another 2-3 operators and asking existing commercial operators to set up non-profit arms to qualify can only make matters worse. It will kill of all remaining low-mid cost operators, given they already face enornmous pressure from rising rental and manpower costs. Those receiving such generous support will easily kill off their competitors. It will reduce diversity. It will freeze our industry at the point when this selection for the next 2-3 operators will take place. After that, this group of 4-5 Anchors will corner the market by their sheer size and advantages, and with new childcare sites deprived for new players.

My proposal made in parliament is for an alternative model. In summary, it calls for:

  1. Government to organise all child care sites under its control (void deck, JTC, government buildings) in a managed low rent fashion. This would comprise more than half of all current child care sites in Singapore.
  2. Government to create or secure more sites, even negotiating with large private landlord as anchor tenant and building mega child care sites out of disused schools or on empty land next to primary schools.
  3. Sites can be grouped into package of centres and each package tendered out for all operators (private and non-profit) to compete fairly in based on concept, quality and affordable fees, and not on rent. Rent will be a prefixed low amount equivalent to what non-profit operators currently enjoy, at $2-$4 per square metre.  Operators cannot adjust fees without the approval of the government or an independent council monitoring quality and fees of operators. Such package of centres should have a fixed tenancy period, sufficiently long enough for operators to meaningfully recouperate investment and thereafter be subjected to contestability again to see who can continue to better run these sites.
  4. Recurrent grants and other support system should not be given only to non-profit operators but to all who are operating on these sites which are under strict fees and quality guidelines.

I believe this alternative will be more outcome-based. We will be focused on affordability and quality, while providing ongoing diversity. Contestability will keep all operators on their toes, ensuring that no group of operators are annointed with special privileges that can allow them to sit back and relax, knowing that the competition can never beat them because of their special position.

In the end, consumers will benefit from this alternative model.

Scrapping the PSLE

Today’s issue of TODAY screamed the headline, “MP echoes calls for PSLE to be scrapped“. MP Hri Kumar had blogged to support slaying the PSLE sacred cow, as long as alternative can be agreed on. During the Committee of Supply (COS) debate on MOE in parliament in March this year, I had made a call to allow parents to opt out of the PSLE when I presented a proposal for primary to secondary through-train schools . The Workers’ Party manifesto had also called for a primary-secondary integrated prorgramme as well.

Education is something close to the heart of Singaporean parents. PSLE is something so entrenched in our system that many wonder what the alternative would be.

I would have preferred outright primary to secondary through-train schools for everyone. No need for an alternative to decide how to sieve and stream students. No need for some secondary schools to be more special than others. Have 10 years to prepare them for the first major examinations at secondary 4. This concept sounds alien to us because we have been so used to an ever increasing competitive system that continously sieve out students to place them onto pathways planned for them to ‘maximise’ their learning, and to determine how resources should be appropriately allocated according to students’ abilities. Through-train from primary school is not a new concept though, as other countries have tried such a model, most notable of which is Finland. Finland had reversed an earlier policy that had streaming and elite grammar schools into one more egalitarian, and had achieved acclaimed international success with this transformation.

However, being practical, I agree that it would be too difficult to implement such a drastic change within a short time. I had conducted focus group discussion with many parents before I presented my proposal at the COS on MOE this year. Many I had interviewed could not imagine what it would be like without PSLE. A common response that came back was, “How do we determine who should go to Raffles?”

I was encouraged though, to hear a significant number of parents supportive of the idea. I was even more encouraged when a former senior MOE official told me such a proposal was submitted several years ago by a school that already has primary and secondary sections. There had always been a vast majority of its students moving from the primary section into the secondary, so the school was interested to have programmes that could prepare students for a more holistic education without the distraction of PSLE. Not surprisingly, this internal proposal was not heard by many as it was dismissed by MOE. PSLE is too sacred a cow to be sacrified. I was encouraged because it shows that there are parents, educators and established educational institutions that will support the idea. Today, I am even more encouraged that fellow MPs from across the party divide are believing in this too.

Education Minister Heng Swee Kiat had responded during COS debate that having such a scheme would transfer pressure to the preschool level and at selection for primary schools. I think we can have ways to execute this scheme without creating such a situation.

One way to thread the ground carefully is to offer the choice to parents. Those who really do not wish to have PSLE can do so. This new through-train track shall not be a short cut into existing top secondary schools. We can exclude all existing Integrated Programme (IP) schools, which currently take in the top 10% of students at PSLE. The parents who opt for this choice must now really believe in the value of the 10-year holistic development plan of such schools. They must know it is highly unlikely their child will enter the Raffles schools and other top schools without the PSLE.

Since every school is a good school, MOE should have confidence in picking a few schools to start the programme with. A quick scan will reveal that there are still a good number of schools with primary and secondary sections run by various groups that are not one of the current IP schools. We can also be bold to pick up outstanding principals of existing autonomous secondary schools that have demonstrated holistic development and allow them to offer a new primary school section. I noted several of my principal friends who had left MOE are helming international schools overseas that cover preschool to high school education, and are doing an excellent job out of it. The programme can let some existing principals rise to the challenge to helm the new 10-year schools.

We do not need to start with so many schools initially. I believe there should be enough demand to start eight such schools, two each in each of the North, South, East and West zones. We can expand the programme as we go along.

MOE currently rotates principals out of schools regularly. A principal now typically stays with a school 4-6 years. A senior MOE official once remarked to me that if you leave principals in a school too long, strange things happen sometimes. So principals are rotated regularly and a new broom sweeps clean with each change.

I believe to make this programme work, we need to identify visionary principals who believe wholeheartedly in holistic development. Have them helm these schools, and let them do so for for a longer period, say 10 years or longer. This will allow them to really build up the character of the school and anchor the programme. With the current short cycle as principal in a school, the principal may find it hard to execute long term programmes. Give the principal the space to truly define how the school should run, given the luxury of 10 years to build up the child. Allow the principal to define the values and mission of the school and to have time to articulate that to students and parents.

MOE has also implemented holistic assessment, particularly in primary schools. Without PSLE, it is the best time for them to show off how to make holistic assessment and holistic development work.

I sincerely believe we can get the first batch of such schools to work, given that we have enough good educators and capable school administrators to do the pilot. With success, we can start to expand the programme. Over time, Singaporeans will start to seriously question why we are so anxious to have our children in a rat race to ace the PSLE. Singaporeans can truly reflect on what education and what good schools should be about. Perhaps by that time, we may truly be able to slaughter the PSLE sacred cow. Till then, a safer way to implement this is to tread carefully at the initial stage by offering a realistic choice for those who do not wish to have their children sucked into an academic rat race that distorts the true value of education.

Proposal for transforming the child care sector

I delivered the following as an Adjournment Motion in Parliament during the sitting on 10 Sep 2012.

Mr Speaker, I like to add my suggestions for reforms to the child care industry even as the government is looking at how to boldly transform this sector.

I wish to declare that a part of my business supplies products and services to preschools. I have also previously managed and owned child care centres but have no longer been doing so for the past 7 years. This proposal is to improve the industry to benefit consumers. It will not benefit my business.

I will first speak in mandarin.



到了90年代,由于更多双薪家庭的产生托儿企开始发展起来。在过去十年里,它的发展更急速。在工作场所开设托儿所变得常见。在2004年初,651托儿所。到了今年6,这数增加到987. 这期间里,托儿所招收的儿童人数从38,455名增加到75,456名。许多组屋新镇里的托儿所供不应求, 有的报名後甚至要排队等一年以上。



2008, 政府增加托儿服务费用的津贴。全日费每月的津贴150元增加到300元,从以上数据来看,我们可看到的是在津贴增加的同时,托儿所的平均费也同幅度增加。如果我们分析私人托儿所,我相信其学费的增长超过政府津贴的增长,因为它们的租金和劳工成本增加得很快。今天的早报就提到私人托儿所租金的困难状况。

在最近的连氏基金(Lien foundation)调查,90%的托儿服务使用者认为,学前教育是昂贵或非常昂贵的。该调查还指出一个严重问题:托儿学费高使到夫妻不想要更多的孩子。


In the child care industry, there are many private operators, most with one or a few centres while several run chain stores.

We also have non-profit operators, dominated by NTUC First Campus and PCF Sparkletots. They are called Anchor Operators, so determined after an exercise in 2009. The criteria used included: (a) $5 million paid-up capital, (b) non-profit and (c) without any religious or racial affiliation.

Anchor Operators function mostly from HDB void decks, at rents of between $2 to $4 per square metre as disclosed by MCYS. For a typical centre of 400-500 sqm, this means monthly rent of $1,000 onwards. They receive generous set-up and furnishing grants for each new centre. In addition, Anchors get recurrent grant for manpower development and learning programmes which is estimated to go into $30 million per year.

MCYS publishes upcoming new centres from HDB and SLA. From its website, I see just a few centres available to private and non profit operators. Yet at the opening of the 100th NTUC centre in October last year, NTUC declared it will open 50 new centres over the next 2 years, which is one every fortnight. PCF too had been growing just as rapidly in the last three years. Just five years ago, PCF was a small child care player. Today, it is number 2 with 90 centres, just behind NTUC. The many new centres by these two do not match the very small number of published centres for non profit operators. Are they given unpublished quotas?

We are told that the role of non profit and Anchor operators is to bring cost down while maintaining quality.

Sir, there is no magic in non profit or in Anchor Operators. The lower fees they provide can be matched by private operators. I will now demonstrate that if private operators get the same benefits as non profit and indeed the Anchor Operators, they have shown that they could match the fees of non profit peers.

Financial modelling for child care is straightforward. The main start-up cost is renovation, fitting out, and investment in resources. Set-up cost can be high, running into several hundred thousand dollars per centre.

In a typical centre paying competitive rents, manpower and rent account for some 80% of all ongoing operating costs. Private operators function from landed houses, commercial and government-owned buildings or purpose-built HDB void decks. Tenancy is often subjected to bidding. When tenancy expires, there is usually open bidding or adjustments to market rate.Competition has caused rents to be in excess of $10,000 to even as high as $40,000 per month in recent tenders.

Anchor Operators get choice new sites regularly at highly subsidized rents. They receive start-up, furnishing, maintenance and recurrent grants. These give them huge operating benefits over competitors.

The difference in monthly rent between non profit and private operators can be $15,000 per month or more. Divide $15,000 by a typical centre enrolment of 75 children. That works out to around $200 cost advantage per child per month. With setup grants, Anchor Operators need to provide less for amortization of investment. They get ongoing grants to defray costs. Yet with these cost advantages, non-profit’s median fees is currently just two hundred over dollars lower than that of private operators. We can find private centres whose fees are not much higher than that of Anchor Operators. Are Anchor Operators with all these cost advantages, really doing enough to keep fees affordable?

Sir, there are other industry data to support my claim.

In a parliament reply this year, MCYS disclosed that EtonHouse, a premium operator with fees of $1,500 per month, charges only $728 per month at its Hampton Preschool. The centre is a collaboration with PCF. PCF secured the site at low rent, and can enjoy other grants. EtonHouse is responsible for programme delivery, set-up and pedagogy. According to a speech by Mr Wong Kan Seng in 2009 , EtonHouse manages the centre and was selected because PCF wanted to work with a private operator that could deliver high quality programmes. While there could be variations in operations compared to a typical EtonHouse’s centre, the fact is, EtonHouse could deliver ‘high quality programmes’ atless than halfof its usual fees when it operates at a void deck that enjoys subsidised rents and grants.

In the 1990s, government buildings started to provide for workplace childcare. There was an interesting practice then to charge $1 or other token monthly rent for purpose-built child care facilities which catered to children of staff working in the building. Bids were called. I noted that in open competition, these sites went to established private players whose own centres charged in the mid to upper price range.

The condition for low rent then was that fees for children of staff in the buildings must be kept low. Premium private operators could match prevailing fees of non profit operators.

Today, costs are escalating due mainly to rent and manpower. Manpower cost affects all in the industry. Anchor Operators with recurrent grants can better retain staff, head-huntfrom other centres and deal with rising costs. Rent is steadily rising in our competitive market.

This has caused fees to rise. Out of pocket payments by parents in many private centres today are higher than before subsidies were increased in 2008. MCYS has no control over fees. Centres just need to give ‘ample’ notice to parents, which MCYS recommends as 3 months, and then fees will go up.

The government has announced new measures for the industry. While they may be initiated with good intent, I fear it could end up creating more unfair competition, destroying the diversity and innovation in our current system.

I have a proposal to bring costs down while pushing for quality and diversity – Child care as a public good with private partnership through contestability.

I noted that in delivering public goods such as transport, the government has pumped billions in rail and bus investments without expectingpayback from private operators or charging infrastructure at market rent to them. We were told this is to bring the cost of public transport to a level that people can accept.

If we wish for young working couples to be able to afford child care and be encouraged to have more children, then we have a case to use a public good’s approach for child care.

Government can build and lease out centres at managed low rent. All its existing sites can come under the model. Based on answers in parliament, there are 290 void deck centres for non profit and 176 for private operators in void deck and JTC buildings, and another 52 in government buildings. That’s 518 centres, roughly 52.4% of all child care in Singapore. With 200 more centres to be built mostly in government controlled spaces, the share of sites under government‘s control will rise.

Old schools, disused community centres and other SLA spaces can be purpose-built by the government into mega child care facilities, even housing different operators under one roof. Child care generally should be within 2-3 km of workplaces or homes. Many small void decks innew flats are not ideal for child care, limiting options in new towns. We can have mega child care sites as long as we ensure there iseasy access by parents, with roads and parking well planned.

We can utilise unused land parcels next to primary schools. There are small plots around some primary schools which are not big enough for meaningful commercial projects. We can tap on infrastructure of the primary schools to addnew preschool facilities. This will make use of unutilised space, save on infrastructure costs and cultivate exchange between preschool and primary school.

The government can negotiate as main tenant withlarge private landlords for sites as a bloc to supplement their bank of child care sites. It can work with property developerswho get additional Gross Floor Area when they set aside preschoolspace at cheap rents and let the government use the space for any type of operator. We should actively pursue all options to increase the state’s child carebank to cater to the mass market.

How do we allocate these centres? Rather than have more Anchor Operators, I have anothersuggestion.

The Anchor Operators concept has skewed the market. It is like giving a boxer super glooves and energy boosters while tying the hands of the competitor and asking them to fight each other. The stated objective for Anchor Operators was to “develop childcare operators that will set the benchmark for quality and affordable childcare services.”

It may have allowed Anchor Operators to achieve higher quality as they get resources, economy of scale, and certainty of their leases. Is it fair to expect other operators to keep pace? Other operators get little or no state funding. They hesitate to invest, worried if others will outbid them for their centres at each renewal, which will wipe out sunk investment. New HDB sites are so few compared to unannounced sites for Anchor Operators. Anchor Operators could lure their staff away with scholarships. Instead of encouraging other operators to step up, it cancause some to think short term and extract as much out of their investment while they can.

We can apply contestability. Contest clusters of sites openly based on concept rather than on rent. This was done before, when government building sites chargedtoken rent and selection was on other factors such as quality and fees.

There is no need for a one-time selection of new Anchor Operators which will strengthen only a select few and weaken everyone else. Worst, it may become impossible for new operators to enter the market, killing off future innovation. We need active competition to raise standards and to continuously drive innovation.

Recurrent and other grants should apply to all qualifying participants as long as they meet strict selection criteria on fees and quality. There should be no differentiation between private and non profit operators. We already know what the current Anchor Operators can do with the support they had been given. Why have we been limiting ourselves to think only selected non profit players can bring cost down? Let’s open up and see how all others, including private operators can better that in terms of price and quality, if given similar support. I believe fair competition may even force current Anchor Operators to better their pricing, ultimately benefiting consumers.

New operators can surface from time to time. Small operators may band together into economic groups to better compete.

Contestability will drive diversity and quality. Operators cannot increase fees without approval. The government will regain control over the fee process to ensure affordability.

Government can better direct its key programmes. MCYS had found it hard to get private operators to go along with some of its programmes, such as SPARK. Last month, we were told only 115 preschools had attained SPARK accreditation, of which just 39 were private operators. This is way way below the target of 85% of all centres to be SPARK-tested by 2013, a figure established by Minister of State for Education, Mr Masagos in November 2010. We can allow only SPARK-accredited operators to contest these sites.

There may not even be a need for state-run preschools. The call for nationalisation was made by many frustrated with differing standards and high costs. We can improve quality even at the low cost segment by having a critical mass of centres available in this public-good model, and the state regulate to steer quality and pricing. It can designate some centres for the low income group by packaging centres for different market segments in each tender exercise.

While this proposal is in the context of child care, it can also be used for kindergartens.

In summary, I am calling for child care to be a public good with fair contestability of sites at managed rents for all types of operators, with tighter control of fees and quality by the state. This will benefit Singaporeans as fees will drop industry-wide while preserving diversity and driving up quality and innovation. I hope the government can carefully consider this proposal.

Growth of child care centres

Growth in child care enrolment

Average child care fees (excluding infant care)