National

Financial woes leading some nurseries created under government plan to close doors

Kyodo

Several nurseries provided by private companies for their employees in line with the government’s attempt to resolve the chronic lack of day-care facilities are closing or are thinking of doing so due to financial difficulties, Kyodo News learned Saturday.

At least eight such nurseries have shut their facilities or withdrawn from the business due mainly to disorganized management, relying on government subsidies.

The system of encouraging companies to launch nurseries for their employees was created in fiscal 2016 under the administration of Prime Minister Shinzo Abe in response to public discontent over the number of wait-listed children, and a desire to encourage more women to work.

But two nurseries each have closed in Tokyo and Osaka, and one in the city of Nagasaki. Another shuttered its doors in Yokohama just two months after it opened.

Nurseries also closed due to subsidy-related fraud in the city of Akita as well as the city of Okinawa.

Under the system, the operators of nurseries could receive subsidies as long as they attained a government-set standard. But the scheme seems to be facing problems relating to mismanagement of government grants and lax approvals of nursery applicants.

Some providers have been arrested for padding the numbers of children in order to receive more government subsidies.

Another issue facing the government’s policy is that nurseries have been created in areas where they are unneeded. By the end of fiscal 2017, there were 2,597 nurseries with a combined capacity to take care of 60,000 children.

However, in a Kyodo News survey carried out in 80 major cities, only an average 49 percent were at full capacity. Small and mid-sized companies provided 54 percent of the nurseries.