Governing Body

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GB.275/PFA/1 275th Session Geneva, June 1999

Programme, Financial and Administrative Committee	PFA

FIRST ITEM ON THE AGENDA

Childcare facilities in the ILO

1. At its 274th Session (March 1999), the Governing Body agreed in principle to establish a childcare facility on the ILO premises, in the form of a crèche,⁽¹⁾  pending further examination of a more detailed proposal at its present session. It was anticipated that the revised proposal would provide further information on a number of issues, including possible locations for an ILO childcare facility, the cost implications of the various options, the level of demand among ILO staff for such a facility, and other related issues and arrangements. The Director-General undertook to have the Office prepare this information as soon as possible as a basis for consultations with Governing Body members, in order to examine whether a consensus existed that the establishment of a crèche should proceed.

Further examination of the issues

2. The present paper reflects the outcome of this further work. The following issues were examined in detail:

(a) the level of actual demand at headquarters for a crèche;

(b) the possible locations for a crèche on ILO premises and the cost of refurbishing available space in the building or of constructing a new facility;

(c) the annual operating costs and income of a crèche and the associated annual ILO subsidy;

(d) the costs of a crèche in the period leading up to full operational capacity;

(e) whether there is interest from other international organizations in sharing this facility and, if so, under what conditions;

(f) alternatives to a crèche on ILO premises; and

(g) management of a crèche, if it was to be established.

(a) ILO demand for crèche space in Geneva
Results of the May 1999 staff survey

Summary of survey results
Children born to ILO officials since 1.1.1995 No. of children where parents contacted Responses Positive responses "Would have been" clients Negative responses	168 122 (73%) 28 from 1.1.2000 49 45

3. According to the information available from the Office's personnel information system, ILO officials currently serving at headquarters have a total of 168 children born since 1 January 1995. A person-to-person telephone enquiry was conducted during May 1999 and the parents of 122 children were interviewed (approximately 73 per cent of potential "clients" were reached).

4. The parents of 28 children (23 per cent of clients contacted) indicated that they would send their children to the ILO crèche should it open early next year.

5. The parents of 49 children (40 per cent of clients contacted) said that they would have placed their children in an ILO crèche at the time of the birth of their children, if such a facility had then been available. While these parents fully supported establishing an ILO crèche, they would not place their children in the crèche should it open in January 2000, as they had already found satisfactory childcare arrangements and did not wish to disrupt their children. In addition, a number of parents indicated that their children would commence school in the near future.

6. The parents of 45 children (or 37 per cent of clients contacted) replied that they would not be interested in making use of a crèche facility. Reasons given for the negative reply varied: a spouse or family member was looking after the children; they did not wish to place their children in a crèche environment; or the proposed cost of the ILO crèche was too expensive. Some parents did not provide any reasons.

7. On the basis of these survey responses, therefore, an ILO crèche could expect to have about 30 places taken up by the children of ILO staff from the commencement of its operation. The level of potential initial usage could be slightly higher still, given that the views of a significant number of ILO staff having pre-school age children (about 27 per cent of the total with such children) were not able to be confirmed during the survey. In this regard, several parents not contacted during the survey have since indicated that they would wish to send their children to the crèche either at the end of the year 2000 or the beginning of 2001.

(b) Location and cost

8. While the ILO building is very large, it has only limited space available that would meet the legal planning and related requirements for a crèche. The main alternative locations in the building are limited to the R1-North Staff Lounge (the original proposal) or the R1-North Coffee Bar. The ground floor of R1-South is not considered feasible to house a crèche because of the relocation cost (the ILO Library is located there) and because of its long and narrow layout (for example, the offices occupied by the ILO Administrative Tribunal secretariat). In the case of each internal option, ease of access to the crèche (and to outside playing areas for children) and security issues would also need to be addressed.

9. An alternative accommodation proposal was made to the Governing Body in March 1999.⁽²⁾  This involved constructing a single-storey, modular building on the ILO grounds. The present paper presents two options in relation to an external building, based on different size considerations (in terms of number of places).

10. Each option assumes that, should places be available in an ILO crèche at the time of ILO meetings, they could be made available to the children of delegates (at a daily fee rate to be determined). All options presented below provide for the possibility of other UN agency involvement in a crèche (whether through the participation of individual children from a number of agencies should there be any spare capacity in an ILO crèche, or at the level of a joint agency approach). If any option was to be implemented, it would be a visible demonstration of ILO concern to address work and family issues.

11. Details on each of the location options and associated construction and related costs are set out below.
 

1. R1 Staff Lounge: Description and costs
Surface area:	620 square metres
Construction/renovation cost estimates	Sw.fr.400,500
Heating and sanitary installation costs	Sw.fr.65,500
Initial furnishings for crèche	Sw.fr.75,000
Total establishment costs	Swfr.541,000
Construction time	Approximately 6 months
Number of places	50 full-time places
Date available for use	January 2000
Advantages	The construction/refurbishment costs of this site are lower than for an external building. No building permit is necessary.
Disadvantages	The staff would be deprived of a place for cultural and leisure activities; no equivalent space to establish comparable staff facilities is available elsewhere in the building. No separate access to the crèche would be possible other than through the ILO car park or building. Relocation of the Provisional Record team during the ILC would be necessary.

2. R1-North coffee bar: Description and costs
Surface area	370 square metres
Construction/renovation cost estimates	Sw.fr.297,450
Heating and sanitary installation costs	Sw.fr.60,000
Initial furnishings for crèche	Sw.fr.75,000
Total establishment costs	Sw.fr.432,450
Construction time	Approximately 6 months
Number of places	40 full-time places
Date available for use	January 2000
Advantages	Involves the lowest construction/refurbishing costs. No building permits necessary.
Disadvantages:	ILO staff and delegates would lose a food and drink facility. It may be difficult to renegotiate the lease with EUREST (the ILO cafeteria/restaurant lessee), as this option would require it to relinquish space on R1 and the company's facilities on R2 may not be able to provide the same range of services or accommodate the same number of clients as under the present arrangements on R1.

3. External building (50 full-time places): Description and costs
Surface area	450 square metres
Construction/renovation cost estimates	Sw.fr.625,000
Heating and sanitary installation costs	Sw.fr.85,000
Initial furnishings for crèche	Sw.fr.75,000
Total establishment costs	Sw.fr.785,000
Construction time	Approximately 6 months (including time to obtain permits)
Number of places	50 full-time places
Date available for use	January 2000
Advantages	Designed specifically as a crèche facility. Easy to enlarge and able to be adapted for other purposes, should the need arise. The crèche would be near the main building, but would not interfere with regular ILO business. Easy access for ILO parents and clients from other UN agencies. The operating costs are equivalent to alternatives inside the ILO building.
Disadvantages	Requires a building permit (but this need not be a major consideration). This option would be more expensive than options 1 and 2 and could not take advantage of the economies of scale deriving from building a larger crèche.

4. External building (joint agency approach: 80-100 full-time places): Description and costs
Surface area	690 square metres
Construction cost estimate	Sw.fr.912,000
Heating and sanitary installation costs	Sw.fr.90,000
Initial furnishings for crèche	Sw.fr.150,000
Total establishment costs	Sw.fr.1,152,000
Construction time	Approximately 6 months (including time to obtain building permits)
Number of places	80-100 full-time places
Date available for use	January 2000
Advantages	Economies of scale in the building costs. Possibility of sharing the subsidy costs with other UN agencies. The potential customers are numerous (eg, the City of Geneva reports that 100 UN children are on the waiting list for crèche places).
Disadvantages	Requires a building permit (but this need not be a major consideration). No guarantees that other UN agencies will contribute to the construction and other costs or be willing to pay a subsidy. The larger the crèche, the more complex it will be to manage.

(c) Operating costs per annum

12. The calculations presented to the Governing Body in March 1999 have now been re-examined in the light of up-to-date data provided by the City of Geneva and estimates of operating costs provided by two experienced directors of local private crèches. This information and a revised estimate of the operating costs of an ILO crèche having 50 full-time places is set out below. It should be noted that the revised estimate of the annual level of ILO subsidy that would be required to maintain such a crèche is of the order of Sw.fr.452,000.

As presented to the Governing Body in March 1999 ( 42 full-time places)
Operating costs (p/a) in Sw.fr.		Income (p/a) in Sw.fr.		ILO subsidy (p/a) in Sw.fr.
776,000		640,000		136,000

Estimate prepared by the City of Geneva (45 full-time places)
Operating costs (p/a) in Sw.fr.		Income (p/a) in Sw.fr.		ILO subsidy (p/a) in Sw.fr.
1,182,900		490,500		692,400

Estimate prepared by two private crèche directors
Operating costs (p/a) in Sw.fr.			Income (p/a) in Sw.fr.		ILO subsidy (p/a) in Sw.fr.
1st estimate (45 places)	928,100		450,750		477,350
2nd estimate (50 places)	797,971		528,000		269,971

Revised ILO estimate (50 full-time places)
Operating costs (p/a) in Sw.fr.		Income (p/a) in Sw.fr.		ILO subsidy (p/a) in Sw.fr.
933,000		481,000		452,000

13. The level of estimated ongoing subsidy required to maintain a crèche is higher than that presented to the Governing Body in March 1999. This is the result of several subsequent considerations. First, the original proposal envisaged a crèche having 42 places; the revised proposals assume a minimum of 50 places. Secondly, and more significantly, detailed information on crèche fees and income levels provided by the City of Geneva and by the private crèche directors consulted have now enabled the Office to provide a more realistic estimate of income for a crèche. In this process, the need for differential fee rates, if more than one child from the same family was placed in the crèche, has been reflected. The basis of calculation identified previously⁽³⁾  for determining the proposed crèche fee to apply in a particular case (i.e. 12 per cent of net family income) has been maintained in these revised estimates.

14. It should be noted that the revised ILO income estimate is slightly less than those submitted by either the City of Geneva or the private crèche directors. For that reason it is considered to be a reasonable (i.e. conservative) estimate. Experience would show whether the level of subsidy could be reduced.

(d) Costs during build-up to full capacity

15. On the basis of the results of the above needs survey, it is considered advisable to base the budget for the crèche in the first year of operations (2000) on a maximum of 32 full-time places and, in 2001, on a maximum of 42 full-time places. It can be expected that in the biennium 2002-03, the crèche would be running at full capacity with approximately 50 full-time places.

16. The table below sets out the estimated costs and income and subsidy required during the period of build-up to full capacity:

	Operating costs (p/a) in Sw.fr.		Income (p/a) in Sw.fr.		ILO subsidy (p/a) in Sw.fr.
2000	(32 full-time places) 667,400		310,000		357,400
2001	(42 full-time places) 801,000		404,000		397,000
2002 +	(50 full-time places) 933,000		481,000		452,000

(e) Other international agencies

17. Contact has been made with the personnel departments and staff unions in the UN, WHO and WIPO to determine their level of interest in participating in a crèche. Although all agencies seem interested, at this point they are unable to make any commitment, as they wish to see whether the ILO will proceed with some form of crèche and, if so, will then commence their own internal decision-making processes. WIPO and WHO have surveyed staff members to ascertain the need for childcare facilities among staff. WIPO has indicated a need for about 50 places; WHO could require a slightly higher number. The UN has not provided a specific estimate. Given the level of possible interest from WIPO and WHO and the likelihood that each agency would wish to satisfy as many staff crèche needs as possible through a single facility, if the ILO was to collaborate with one or more of these agencies in establishing a crèche the most appropriate option would be the larger external facility. But precise arrangements would need to be worked out with each agency, in particular on how capital costs would be recovered, and this would take time. Moreover, funds may not be readily available to the other agencies to participate in a crèche in accordance with any timetable the ILO may wish to pursue. It is also worth recalling that there is previous experience of a shared UN crèche that failed (the Crèche des Nations), because the various agencies involved did not pay the subsidies to which they were committed. On balance, it would be prudent not to proceed with the construction of the larger external crèche unless there was a clear, irrevocable and binding commitment from participating agencies to share in the investment and to give full financial guarantees to pay for their allotted number of places, even if they were not filled. It is doubtful whether such guarantees would be provided within the time-frame contemplated to establish a crèche, if at all.

18. The operating costs, income and subsidy (which would be shared with other participating UN agencies) required for a crèche having about 80-100 full-time places is estimated below:

ILO estimate
	Operating costs (p/a) in Sw.fr.		Income (p/a) in Sw.fr.		ILO subsidy (p/a) in Sw.fr.
80 full-time places	1,420,000		735,875		ILO	406,250 - 50 places
					Other agencies	277,895 - 30 places
100 full-time places	1,715,000		905,625		ILO	375,000 - 50 places
					Other agencies	433,975 - 50 places

19. It should be noted that the levels of subsidy in the above table have been estimated on the basis of data provided by the City of Geneva and actual income data of the positive respondents. This data indicates that the average annual crèche fees for the children of international officials who attend local public crèches varies between agencies (ILO -- Sw.fr.10,900; other agencies -- Sw.fr.7,700 to Sw.fr.12,600). This explains the difference in subsidy levels presented for the ILO and other agencies.

(f) Other alternatives

(i) "Buying" space in an existing crèche

20. The City of Geneva would be willing to consider the possibility of reserving 40 spaces for ILO children in either of two local childcare facilities, "La Providence" or "La Petite Maisonnée". The cost to the ILO per place per child each year would be in the order of Sw.fr.17,000. This subsidy excludes crèche fees: ILO parents would have to meet these fees separately. Assuming 40 children at a cost of Sw.fr.17,000 each, the annual ILO subsidy required under this option would be Sw.fr.680,000. In addition, the City of Geneva would expect a "one-off" contribution by the ILO to extend/refurbish the above-mentioned facilities to provide additional capacity. The City of Geneva has indicated its willingness to negotiate with the ILO on this issue, but until that time it is not possible to estimate the amount of the financial contribution that would be expected from the Office. Therefore, under this option, there would be a certain number of places reserved for ILO officials in a crèche, but the crèche would not be located on ILO premises. In addition, the costs to officials concerned would not be significantly reduced despite the ILO subsidy and a substantial ILO subsidy would be required on an ongoing basis. Moreover, there might be lengthy negotiations before an agreement could be reached with the local authorities on the "one-off" financial contribution. On the other hand, this would be the least complicated solution administratively, as the City of Geneva would have full responsibility for the management of the crèche. On balance, this option is considered to be too expensive and is not recommended.

(ii) Education grant for pre-school ILO children

21. If ILO officials having pre-school children received an "education grant" for children enrolled in a crèche (on much the same monetary basis as is currently provided for school-age children), the estimated cost to the ILO could be around Sw.fr.7,000 per child/per annum in Geneva. Even if only half of the ILO's crèche-aged children in Geneva were to benefit from such an arrangement, the annual cost would amount to about Sw.fr.560,000, plus associated administrative costs. It should also be noted that in providing this grant the ILO would be departing significantly from the current arrangements governing education grants within the UN common system. It is not proposed that this option be pursued.

(g) Management of a crèche

22. As indicated previously,⁽⁴⁾  it is proposed that any crèche established on ILO premises would be run and staffed by an independent, legally established body under a commercial contract with the Office. The contract for crèche services would, among other matters, include provisions governing crèche policy, the delivery of high-quality childcare services by competent, professional staff, as well as the day-to-day operation and management of the facility by its director. An advisory committee comprising representatives from the ILO administration, the Staff Union and parents would liaise regularly with the director on policy, staffing, budget and operational matters. It might be noted that such contractual and advisory arrangements already apply, for example, to the concessions granted to EUREST in relation to the restaurants and bars in the Office.

23. On the basis of the information now available and presented above, the Director-General does not consider that it is possible to make a positive recommendation to establish an ILO crèche. Consultations will be undertaken to explore the possibility of alternative approaches, and developments will be reported to the Committee in November 1999.

Geneva, 14 June 1999.

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1. GB.274/PFA/15 and GB.274/9/2.

2. GB.274/PFA/15.

3. GB.274/PFA/15, Appendix 1, p. 5.

4. GB.274/PFA/15, para. 12.

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