By Yi Whan-woo
Seoul’s 25 district offices are on the verge of suspending free daycare services because they are running out of funds to support the program.
The Seocho District Office said Monday that it has already used up its allocated funds for this month, and has taken out an emergency loan from a credit card company.
Twenty four other districts said they face a similar problem, and added that they will have to stop the program unless the central government increases subsidies.
The shortage of funds comes after the National Assembly approved the bill to expand free daycare services to all children aged two and under from households in all income brackets. The previous policy was only eligible to households in the lowest 70 percent-income bracket.
The head of district offices said the decision was made without any prior discussion with municipalities. The number of children in the city that benefited from the subsidy was 66,840 in July this year, with an additional 700 billion won ($618 million) required by the Seoul city government. The central government, however, only provided 285.1 billion won ($251 million) to municipal governments across the country.
“We’ve been running out funds since the beginning of the month, and we’ve already used the amount initially planned for October,” a Seocho district official said. “With help from the Ministry of Health and Welfare, we were able to get an emergency loan from a credit card company for this month. But if the shortages in funds continue, we wil have no other option than to suspend our nursery services.”
Seocho was the city’s first district to spend its 8.5 billion won allocated for the free nursery program this year. The number of children eligible for the service increased from 1,665 in 2011 to 5,113 this year.
Songpa, one of Seoul’s three most affluent districts including Seocho and Gangnam, said it got an emergency loan of 2.9 billion won ($2.5 million won) from the city government for spending in September.
“We do not have a plan for an emergency loan, but we’re still at risk of suspending the free nursery service,” a Songpa district official said.
The council of the district office chiefs in July demanded the central government cover financial shortages which resulted from the expanded nursery services. The council said it will discuss the case again with the Ministry of Strategy and Finance next week.
“If this situation continues, most districts will have to suspend the services in either September or October. We’ll join hands with other municipalities and local councils until the government comes up with a solution,” the council said in a statement.