As of: March 15, 2024, 4:29 p.m
By: Manuel Rank
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From September 1st, a new funding model for daycare centers will come into force in Munich.
The concern of many parents: contributions from private daycare centers could increase.
What are the consequences of the change?
Munich – So far, daycare and crèche places in Munich have been comparatively cheap.
But the city has decided on a new support system - for many parents the contributions could possibly increase significantly.
There had already been a dispute before the city council's decision when switching from the previously applicable “Munich Funding Formula” (MFF) to the so-called deficit compensation procedure for non-profit and private daycare centers.
Dispute over the new funding system for daycare and crèche places in Munich
Criticism also comes from private providers - many do not want to join the new system.
Many daycare centers sent letters to parents announcing that contributions would increase significantly.
The concern is great, and so is the anger.
At the end of February, around 500 parents gathered at Odeonsplatz to demonstrate for affordable daycare places.
A petition to reintroduce the MMF was also launched - which now has around 11,000 supporters.
According to the initiators, over 10,000 children in Munich are affected.
Expensive future: Many parents of children in private daycare centers are concerned about the coming kindergarten year.
Because of the new Munich daycare funding model, contributions there could possibly increase significantly.
© Patrick Pleul/dpa
Nevertheless, the Munich city council approved the new funding system.
With the new kindergarten year, which begins at the beginning of September, the funding of daycare centers will change.
Our editorial team
explains what the change is all about and what consequences it means for parents.
Why is the old Munich funding system being replaced?
Currently, 618 daycare centers in Munich are being subsidized based on the Munich funding formula (MFF), which is in place until September 1st, as stated in a press release from the city on February 6th.
Thanks to the city's annual funding of around 170 million euros, almost 83 percent of all children receive free daycare or, compared to other municipalities, very cheap care: parents generally pay nothing for kindergarten places, and a maximum of 162 euros for daycare centers.
Currently, 191 daycare centers run by private providers are also part of the funding system;
However, 154 other private ones are not; they can set their own contributions.
Background of the new funding concept
A private provider sued the Munich Administrative Court in autumn 2021: subsidizing the predominantly municipal facilities would create a competitive disadvantage.
In the reasons for the judgment, the court explained that the Munich funding formula interfered with the funders' fundamental right to professional freedom and was therefore unlawful due to a lack of legal basis.
Need for action for the Munich City Council: After a long discussion and many changes, the majority decision was finally made at the beginning of February.
This has since been improved by the parties involved.
The new funding concept will come into force from September 1st – and will replace the old one.
What changes?
Deficit compensation model with a higher meal allowance
The new funding system is a so-called deficit compensation model.
To put it simply, the new procedure means that the providers are compensated for costs such as personnel by the city - in addition to state funding.
Profits should no longer be possible for participating providers, because these will be deducted at the same time.
According to the city, this is intended to avoid incentives for higher fees.
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The new model is also intended to ensure that many families benefit indirectly from the funding provided by the providers through low fees and thus create “equal educational justice and opportunities,” it was said at the beginning of February after the decision of the Child and Youth Welfare Committee and the Education Committee.
After the model was first presented, the town hall coalition made up of the Greens/Pink List and SPD/Volt made improvements due to strong criticism, including from the umbrella association of Bavarian providers of daycare centers (DBTK).
The Munich funding formula has not yet funded meal fees.
Since the improvement, the city of Munich has been subsidizing every day of meals with 3.50 euros starting from the next kindergarten year.
According to the city, this allows the providers to reduce the meal allowance for parents accordingly.
Furthermore, the reimbursement of administrative costs is to be further increased, and the city council resolution provides for supporting small private daycare centers in financial emergencies.
Criticism, but also a lot of approval from daycare providers
According to the city, all daycare centers located in Munich can take part in the deficit compensation process - regardless of whether the providers are welfare associations, private commercial or parent-child initiatives.
In particular, the prerequisite is that the institutions are generally eligible for funding according to the statutory funding.
According to the city, it is entirely up to the respective sponsors whether they take part in the funding.
Large social organizations such as Diakonie or Arbeiterwohlfahrt (AWO) Munich are cautiously optimistic about the deficit compensation procedure - but also look back “a little wistfully” on the “tried and tested” Munich funding formula, as Karin Sporrer from AWO Munich said.
The daycare centers were specifically supported by the city's funding instrument to "achieve the goal of equal education and opportunities for all children."
Non-profit organizations want to join the funding model: but there are still “numerous unanswered questions”
According to the information, the AWO Munich will take part in the new funding model.
“This means we can continue to finance needs-based staffing levels in the future and we can continue to offer our high-quality educational offerings.
And that while continuing to provide family-friendly parental contributions,” Sporrer continued to tell our editorial team.
Andrea Betz, board spokeswoman for Diakonie Munich and Upper Bavaria, also confirmed this step to our editorial team.
In a “trial phase” we will then evaluate whether the model is suitable for the Diakonie’s daycare centers in the long term.
The AWO runs 20 kindergartens in Munich for children from the age of three until they start school.
According to its own information, the Munich district association wants to take part in the new funding model.
© Ole Spata/dpa
But even after the city council decision, there are still “numerous open questions about how the model should be implemented,” said Betz.
“We therefore very much welcome the fact that the city council has decided to establish a regularly meeting accompanying group in which we as a diakonia will be very actively involved,” the board spokeswoman continued.
Private providers see themselves being discriminated against by new funding – and fear an increase in the cost of daycare places
The umbrella organization of private providers sees private-commercial daycare centers as being discriminated against by the new funding compared to other providers.
And this despite the fact that according to the Bavarian Child Education and Care Act (BayKiBiG) they are “expressly recognized as equal and equal providers of day-care centers,” said the chairman of the umbrella association of Bavarian providers of day-care centers (DBTK), Benjamin Tajedini, and the managing director, Andreas Lorenz said in a statement in early March.
Tajedini and Lorenz also fear that the diversity of providers could be jeopardized by the deficit compensation system and that the freedom to practice a profession could be massively violated.
Lorenz told Bayerischer
Rundfunk (BR)
that the newly approved funding model could lead to the bankruptcy of smaller private daycare centers in particular.
Either the sponsors could join the new funding, but thus not build up financial reserves that are urgently needed for expenses such as job advertisements, Lorenz told
BR
.
However, if they decide against the new system, they would have to significantly increase contributions to compensate for the lack of funding.
A daycare place with a private-commercial provider would cost parents more than 1,000 euros from next September, Lorenz told
BR
.
Cost explosion or new funding change not so bad?
Many parents now fear that the costs for daycare and crèche places will rise rapidly from the coming kindergarten year.
Before the model was adopted, some private providers had already announced in letters to parents that they would have to charge contributions that were double or sometimes triple as high.
There is talk of up to 1,200 euros, a father of a family reported to the
Munich Merkur
.
How exactly things will continue for parents of children in private daycare centers remains an open question and also depends on whether the providers will join the new funding model.
Ultimately, according to the city, the amount of the contributions is a decision made by the respective provider.
According to a survey within the DBTK, a “significant number of providers” will decide against participating in the new funding system, according to the association’s statement.
According to the information, these also include institutions that had previously taken part in the Munich funding formula.
As a result, the DBTK fears that parental fees will “increase dramatically” for many parents.
Meals allowance and opportunity for financial support – coalition defends new concept
The red-green town hall coalition has a more positive outlook on the coming kindergarten year.
“Despite difficult conditions, we managed to keep the kindergarten free and the fees for crèche and after-school care affordable,” said a press release at the end of February.
Due to improved incentives such as the meal allowance, it is hoped that more private providers will join the funding system than initially arrived.
The coalition also referred to financial support if care costs rise too much.
Mayor Dieter Reiter (SPD) also appealed to private providers on Friday, March 8th, with an urgent request to take part in the new funding model.
“In some cases, parents only get two weeks to sign new contracts, or they risk losing the urgently needed childcare place,” Reiter said in a letter.
However, the SPD mayor further emphasized that fee increases of more than 1,000 euros were incomprehensible to him.
According to the city of Munich, the switch from the Munich funding formula to the new voluntary daycare funding will fundamentally change nothing for parents with children in municipal daycare centers.
Further information about the new funding system for Munich can be found on the city's website.