Nearly 1,000 early years childcare services have closed their doors over the last six years, new figures show.
Figures obtained by RTÉ News from the Department of Children show that 977 early years childcare services have closed since 2019.
While 579 new services opened during that time.
The Federation of Early Childhood Providers (FECP) said childcare facilities are closing because of rising costs and a lack of funding from the Government.
40,000 children are on waiting lists for childcare across the country.
The Early Childhood Care and Education Programme (ECCE) is a free, two-year programme available to children between two years and eight months of age, and five years old.
It runs five days a week and provides three hours of free pre-school a day.
But providers say the Government's funding of between €69 and €82 a week per child is not enough to sustain their services.
Watch: Childcare provider says costs have increased but Govt funding is the same
Racheal Govan, who owns Footprints Early Years childcare service in Dublin, said her costs have increased but the funding from the Government has stayed the same.
"Last year the increase in the core funding was 5c per child so if you look at the cost of living, the cost of rents, the cost of rates, tax, now the introduction of the pensions, that's another €12,500 that's going out of my account," she said.
"Even since last year my wages (for staff) have risen by €17,500, so where am I finding the additional money if I am getting an additional 5c per child, so that math is not working out for anyone," she added.
FECP Chairperson Elaine Dunne said the increasing costs for creches is not sustainable if they cannot increase their fees.
"We see ECCE services in particular have closed down over the last five years and they are closing down because the funding is not suitable for the business model that is there," she said.
"If you want to keep quality then you have to pay for quality," she said.
"If you are getting €69 a week per child - and if you are in core funding you are on €81.40 a week - that is not going to keep your doors open. You can't pay your staff wages and many of these ECCE services, the providers themselves are not even taking home a wage," she added.
The core funding scheme was introduced by the Government in 2021 to assist early learning and childcare providers with operating costs. In return for signing up, operators had to commit to freezing their fees.
Over 4,000 services are signed up to the scheme.
Figures obtained by RTÉ News show that over 177 childcare services withdrew from the Government's scheme in the first three years.
Averil Sheehan, owner of Care-A-Lot childcare in Cork, left the funding scheme, which then allowed her to increase her fees.
She said her fees have gone up from €50 a day to €62.50, which she said saved her business.
"We were stuck in a historical freeze since 2017 and we weren't allowed to increase our daily fee so that meant to me that I wasn't matching inflation since 2017.
"Everything had gone up, from toilet rolls to art and craft materials, heating oils, food and I wasn't getting enough funding to match the increase in inflation. It was either I would sink or I would have to try and swim," she added.
Catherine Kelleher has three children in Ms Sheehan's creche and said the increase in fees has had a huge impact on her finances.
"That was tough going, one full pay cheque was already going to pay childcare fees and now I have to go into the second pay cheque to pay for the fees, which obviously impacts on grocery bills. You have to tighten up your budget everywhere else," she said.
In a statement, the Department of Children said in 2024 there was a five-year high in the number of early years' services opening and a five-year low in the number of pre-school services closing.
357 services opened while 131 services closed, which resulted in a net increase of 226 childcare services opening in 2024.
But this department figure includes school age services; these services are for children over the age of five, so a different cohort, and includes after school and early learning years added together.
If the figure for services such as creches and ECCE for younger children is broken out, 96 services opened, but 95 closed.
In terms of demand, the department also said that overall enrolments in early learning and childcare services between the ages of one and three increased from 36,000 to just under 40,000 between 2022 and 2025.
Yesterday, the Government gave the green light for a State-led early learning and childcare investment programme - in an effort to deal with the rising waiting lists and demand for childcare.
Under the plan, the State will try to buy buildings which will be used as childcare facilities. Each building will deliver more than 100 places.
The process will begin this year with the acquisition of buildings and the department said there could be 800 places available by early 2027.
The Federation of Early Childhood Providers said it would be very difficult to implement.
Ms Dunne said she believes the Government is putting the cart before the horse and that childcare providers had not been consulted.
"We don't know anything. There has been no consultation and the fact that they are rolling ahead with the cart before the horse and we are looking at them going what is going on because we don't know as there has been no consultation. I think that is so disrespectful to the providers out there today," she said.
Asked if she would be interested in applying to be one of the providers under the planned new Government scheme, Ms Govan said: "I created this, I love what I do, so why would I want it to be taken out of my hands to work for someone when I have created this ethos in my policies to ensure the quality that I want to meet.
"Why would I want to go back and work for someone when I was happy delivering quality services prior to that," she added.
