PCF fee increase- Aye or Nay?

PCF, one of Singapore’s largest and nearly ubiquitous early childhood education and care providers, is set to raise fees at some centres. The fee increase has understandably caused much concern and discomfort amongst Singaporeans. PCF, or PAP Community Foundation, as a non-profit anchor operator, gets substantial funding from the government. Why then does it still need to raise its fees? Also, given that PCF has one of the largest shares of the market for mass market early childhood education and care, low and middle income families will most likely be the ones who will feel the greatest impact from the fee increase.

PCF has come out to defend itself. Its spokesperson explains that the fee increases are in “tandem with increases in our investments in curriculum and learning environment as well as the employment of qualified teachers who continue to receive on-going profession development”. The spokesperson also added that, “Such increases are also needed to defray rising operational costs, most notably in the salary costs of preschool staff.”

What does that whole chunk of gibberish mean? Why use such language? Why not just say things plainly?

PCF’s spokesperson also pointed out that even with the fee increase, the revised fees are still below the fee cap set by the Early Childhood Development Agency (ECDA). The spokesperson also assured that even with the fee increase, the fees at “vast majority” of PCF centres will still be lower than the median fees of other anchor operators and pre-school centres.

This is the sort of typical response from government agencies, and agencies perceived to be related to government, that pisses people off. Because to many, what PCF is saying sounds like this “Eh don’t complain already lah. You just have to trust us when we say that we HAVE to increase our fees. Don’t understand? Never mind. Anyway, our fees are still lower than other people’s leh. If you not happy, you can send your child to other operators lor. But you won’t find anyone lower than us. So you just suck it up la.”

True, PCF fees are probably still lower than what other operators charge. True, PCF probably provides fairly good education and care for young children. BUT, all that is scant comfort for families who are already finding it difficult to make ends meet.

For those families, any fee increase could mean that they have to forgo something else. It could be that family members have to eat one meal less. It could mean that the parents need to work another job. It could mean that the grandparents would have to put off seeing the doctor.

What is worse is that PCF seems to be raising their fees at a time when they have substantial surpluses (as an institute of public character, or IPC, PCF does not generate surpluses rather than profits). According the PCF’s financial statement for 2014, in the period of 1 Jan 2014 to 31 Mar 2015, PCF accumulated a total surplus of SGD1,469,575 compared to the surplus of SGD942,861 accumulated in the period of 1 Jan 2013 to 31 Dec 2013.

So not only did PCF have a substantial surplus, there was an increase in their surplus between 2013 and 2014. Even accounting for the additional three months in the accounting period in the 2014 financial report, there was still an increase of about 24% in surpluses in 2014 compared to 2013. If there is an increase in surpluses, why then does PCF feel a great need to increase their fees?

Unless PCF puts up a strong and convincing case to explain why they need to increase fees even though they have substantial surpluses that seem to be increasing, can we blame people for being pissed off? Why should we simply trust that PCF has good reasons to raise their fees? Why should we simply trust PCF that raising their fees will yield a net positive benefit for society?

Then some people who try to defend PCF may question our right to demand PCF to explain themselves. What right do we have to know how PCF spends their money? Of course we have a right. Even if we do not have kids attending PCF centres, we still have a right to know. PCF is an IPC. It does not pay tax. Significant proportions of the donations it receives are tax exempt. As taxpayers, of course we have a right to know what PCF is doing with their money.

Of course, I am not saying that PCF MUST never increase their fees. In fact, I think there are good reasons for PCF to increase their fees. But PCF has done a terrible job in communicating their reasons for increasing their fees. Not only is what they have said so far about the fee increase not convincing, it is confusing, confounding and frustrating.

So why do I think that PCF may have a case for raising their fees? Costs (e.g. rental) ARE going up. PCF may think that they are no longer absorb the rise in their costs.

PCF would also need additional funds to improve the quality of education and care for the children under their charge. To do this, PCF would need to pay their staff better so that they can attract higher quality people to join them. PCF would also need to spend on improving their curriculum, acquiring better resources, and provide continual training and upgrading for their staff.

It would have been even more convincing if PCF was able to give some put a dollar value to their rising costs and possible investments for quality improvement to bolster their case for raising fees.

As for the surplus, PCF is only able to accumulate surpluses because of the donations they receive. When economy is not doing well, it is possible that PCF may not get as much donations. Looking forward to 2016, the Singapore economy looks to be facing considerable headwinds. It is therefore legitimate for PCF to be concerned that they may not get as much donations. It would be financially prudent for PCF to raise fees now in anticipation of dropping donations so that it does not go into deficit and have to draw into its reserves or worse, compromise on the quality of care and education of the children under its charge.

It would have been better if PCF could have given more details about the sort of assistance for parents who may not be able to afford the fee increase. These details could be in the form of a case example to show that even after the fee increase, with the various assistance schemes available, a low-income family will probably not spend any more on early childhood education or care for their young child at PCF.

Then what about those who can afford the increase? Surely they will be upset that they are left to bear the burden of rising costs and investments to improve the quality of education and care of those who cannot afford the increase, right?

I think PCF can openly thank those who do not get any subsidies to reduce the impact of the fee increase (i.e. probably those who can afford the fee increase) for their understanding and help in leveling up the quality of early childhood education and care for everyone. I think we can trust Singaporeans to have a strong sense of community. I think that we can trust that Singaporeans understand that those of us who are better off have a duty to help those who are not as well off. I think we can trust Singaporeans to understand that doing so will benefit everyone. I think we can trust Singaporeans to want to be united in purpose and build a better Singapore together.

PCF’s fee increase is probably justifiable. But PCF’s terrible communication process is unforgivable. I hope other government agencies, and agencies that people probably associate with the government, learn from this experience. Have some empathy. Stop trying to just tell us things. Try to see and feel from our perspective. And craft your message from a starting point of empathy.

[Featured image from Yahoo Newsroom]

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9 thoughts on “PCF fee increase- Aye or Nay?

  1. What I take issue with is the fact that pcf dominates the market. So naturally, when it increases its fees, other private providers of such services will follow suit. It’s the same deal with hdb. Despite being dominant in the property sector in singapore, it chose to benchmark against private property sector. I dunno la. I just find this very weird. I feel like I’m getting ripped off. Like majorly.

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    • Your views are shared by many. To be fair, I think there comes a time when fees really have to be raised. My point is that PCF has been terrible at convincing people that there really is a good case for fees to be raised. They just expect us to suck it up and accept it. And still be thankful that the increase in fees isn’t any larger. That sort of attitude is really unforgivable.

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      • The main issue i have with this Government is their lack of foresight. They claim to be capitalist in nature. However, peel the layers and u realise they aren’t capitalist in the truest form, because they are all up your business. PCF is one example, where it dominates the market, any action it takes, will influence the other minor players. Likewise HDB.

        My issue is not really that PCF does not have the right to increase fees, and your point is noted that they seem to “shove” it down our throats rather than rationalizing, thinking of us as sentient beings, keen of rationalization (but really, is that soo shocking?). My major issue is with the way the one party who’s been in business for 50 plus years, seems to be influencing the market(s) of various sectors and says it leaves it to market forces. A laissez-faire governmental approach, when it’s so far from the actualities of the situation it could be featured in a star wars movie.

        Also, i think the timing of the announcement is suspect. Then again, it does not shock me.

        Liked by 1 person

  2. It could possibly be that they aren’t trying to convince people. Instead, they’re defending the decision which they know will not be taken well. Hence the tone of voice which further reinforces the public’s opinion of them.

    Sounds familiar?

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  3. Lots of hyperbole, most people are not worried about their next meal.They are worried that their wants such as eating a meal would be downgraded to save the funds or reducing their outings
    Is it not good that childcare staff and teachers and principals will get better pay.
    Likewise, even cleaners etc will get better pay.
    How do you expect even non-profit organisations or profit organisations to be able to afford other than just raising what fees they can collect on services provided.
    I guess your rebuttal would be govt pays.
    I agree govt should subsidise the middle income to low income but for all, No, not for all, would not be acceptable unless you like the taxes to be significantly higher.

    Regards

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    • I don’t think you have read my post carefully and fully. I did not say that most people would be worried about their next meal. I am saying that those who are from low income families would be. Thankfully, those who are from low income families are not in the majority in Singapore.

      Also, if you read the post in its entirety, I did not object to the fee increase. In fact, I actually provided reasons why I think that the fee increases are justifiable. The main thrust of my post was that the communication process was terrible.

      I hope that you can read thoroughly, and exercise some intelligence when commenting. That would lift the quality of discussion.

      Nevertheless, thanks for dropping by and commenting.

      Like

    • Why not for all? Honestly, i don’t see any way forward except for Singapore to be a welfare state in years to come. Of course, my belief in that direction has been shaken by the 70% (who for the most part, do not understand how a proper welfare system works).

      Like

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