Paolo Fiorucci sees the new system, which is entirely different from the previous one, as a revolution rather than a reform. He is the president of the Luxembourg Federation of Child Education and Care Services (FELSEA), which was involved in shaping the new reform.
The reform requires care facilities to make significant adjustments, as the flat-rate pricing will be replaced by billing based solely on the actual time a child spends at the facility. Adding additional charges to the final bill will also be prohibited. Furthermore, an increase in staff numbers is expected.
Private care facilities risk lower revenues under the new standardised billing rules. This could pose challenges in a sector where many operators are already struggling to remain viable. Targeted government support is planned to mitigate these effects. “We will first provide compensation so that contracts covering a small number of hours can still generate a fixed revenue. This is very important. Additionally, there will also be a rent subsidy, which is a fixed sum that will be distributed monthly,” explains Paolo Fiorucci.
The FELSEA president emphasizes that the reform provides private care facilities with a level of security they previously lacked. “This additional security also allows us to offer families flexible contracts without losing revenue. The savings generated can then be reinvested to improve the quality of our services. This is a very important aspect,” he explains.
Nonetheless, three key issues remain unresolved, particularly how to define the “reasonable profit” that such facilities are allowed to earn. Any amount exceeding this threshold would be deducted from government subsidies. FELSEA hopes the government will adopt a sensible approach in setting this limit. “So far, we have cooperated well with the government, and we expect them to understand that without profits, there can be no reinvestment or long-term security for these companies,” Fiorucci adds.
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