Coping with laws and regulations: overcoming barriers in IKC formation

It is not for nothing that IKC education has been a trend for years: childcare and education are convinced of the added value of integrated children’s centers. But laws and regulations often stand in the way of such cooperation. Arjen van der Plas, childcare and education specialist at Van Ree Accountants, explains how organizations can overcome barriers to business operations.

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Childcare organizations and educational institutions work closely together. Collaboration is in the genes of these sectors and has become a matter of course for many organisations. One continuous line for children aged 0 to 13 years and a separate development environment for children. A win-win situation for childcare organizations and educational institutions, but especially the children. Although collaboration seems pedagogically obvious, it is insufficiently facilitated by legislation and regulations. Child care organizations must overcome the necessary barriers when it comes to business operations to achieve a successful partnership. The sectors are not deterred by this, but take up the challenge with an open mind. This is evident from the stormy development of the IKCs.

Cooperation base

As a financial specialist in both the childcare and education sectors, we encounter many of these barriers among our clients, explains Van der Plas. ‘We have learned how to overcome these barriers, let’s call them ‘challenges’. Or better: how opportunities can be used. Cooperation is a must, but this does not mean that you seek cooperation with education from a dependent position. The most successful cooperation is achieved where there is equality and mutual trust.’

According to Van der Plas, the fear that the program will choose another childcare partner, or perhaps organize the childcare independently, is not a good basis for cooperation. ‘Start from your own strength and social importance. Childcare has a lot to offer education: innovative power and an outward-looking outlook, prevention or reduction of educational arrears, insight into future enrollment in primary school and widespread expertise among educational staff. There is every possible reason to enter into cooperation from an equal position. Of course, many other factors also come into play. Is there, for example, a click at board and management level? Does the municipality adopt a constructive attitude to facilitate cooperation? Do the cultures fit together? The most important condition, however, is whether there is a shared vision where the child comes first. When that is the case, the foundation for a good collaboration has been laid.’

‘Each type of collaboration brings its own points of attention’

Forms of cooperation

Collaboration can take many forms. Some child care organizations and educational institutions choose the most far-reaching form of cooperation, such as an administrative or legal merger. There is then a unity of management and supervision. This does not mean that cooperation means that you as a childcare organization have to give up your independence. Collaborating on the basis of a collaboration agreement or other creative forms of collaboration is also possible, says Van der Plas. “Each type of collaboration has its own points of attention. Regardless of which form of cooperation you choose, it is important to secure the cooperation by establishing administrative agreements and common policy. A collaboration that depends on specific people is vulnerable.’

Bottlenecks in collaboration

Collaboration also creates bottlenecks in different domains. Bottlenecks occur, for example, when it comes to culture, safety regulations or diversity in external supervision. As a financial specialist, Van Ree has the best insight into operational bottlenecks. Van der Plas shares experiences in two of these bottlenecks, namely housing and tax bottlenecks.


To promote cooperation, childcare and education are often located under one roof. Many childcare organizations rent space from an educational institution, for example because the educational institution is dealing with excess capacity. It seems attractive because the rental prices are often at a lower level than commercial rents. Especially when it comes to childcare and VVE. But when the space is used for education, it also entails risks.

“The educational institutions are the legal owners of the school building, but municipalities have financial requirements. Space with teaching use may be required for teaching if, for example, there is growth in the number of pupils. In this way, the childcare organization can be pushed out of the school, so to speak,’ says Van der Plas. ‘It is important to prevent this. This can be done in various ways, such as establishing agreements in joint consultation between the municipality, care and education. For example, many municipalities have a “rental and communal use bill”. With new children’s centers to be built, agreements can already be entered into during construction whereby a part of the building is specifically designated for childcare.’

‘The construction of new children’s centers also causes bottlenecks’


The construction of new children’s centers also causes bottlenecks. The municipalities are obliged to realize suitable and, since 1 January 2021, almost energy-neutral buildings for educational institutions. The municipality does not apply this obligation to childcare. When a children’s center is built, the question is therefore invariably how the financing, especially of the childcare part, should take place. Van der Plas: ‘The municipality is not formally responsible, and the educational institution is tied hand and foot based on current legislation. An investment ban applies to educational institutions in primary school. The educational institutions are also not allowed to use public funds for the construction of childcare facilities, even if this investment pays for itself in the form of, for example, rent.’

“A common solution is for the municipality to also finance the construction of the care section. Subsequently, the municipality rents it out to the care organization, with or without the intervention of the educational institution. The municipality is often only prepared for this when IKCs are newly built and not when expanding or renovating. Other solutions are therefore possible. You can then think about purchasing the childcare organization yourself with any guarantees and warranties. Pre-financing of the educational institution from private cash flows is also possible.’

Operating costs

Integrated childcare centers often incur operating costs in addition to rent, such as common costs for cleaning, energy and (daily) maintenance. If you are a tenant in a multifunctional home such as a childcare organization, you are not a member of any Owners’ Association. “It is therefore important that you make clear agreements on the distribution of the joint costs. In practice, we see that many educational institutions charge a standardized fee for common expenses. However, the question is how this fee is structured and whether it corresponds to the actual cost level. Sales tax can also be a point of attention when passing on operating costs.’

‘In practice, we see that combination jobs lead to VAT risks’

Tax bottlenecks

One of the synergistic benefits of the collaboration concerns the deployment of staff. Both sectors are already facing unprecedented staff shortages. Van der Plas: ‘We expect that the staff shortage will not be resolved for the time being. This is due, among other things, to the government’s plans for “almost” free childcare and the implementation of the National Education Program to remedy the arrears caused by corona. This requires additional staffing. Childcare organizations and educational institutions working together are therefore increasingly using combination jobs. Encouraging combination jobs, especially in after-school care, is one of the measures against the growing staff shortage. This was stated in the letter to the Folketing about the staff shortage in the sector, which the state secretary wrote at the end of 2021.’

“In practice, however, we see that combination jobs lead to VAT risks. Various childcare organizations face additional assessments from the Tax Office due to the use of educational staff as teaching assistants at an educational institution. A typical example of tax legislation that has not yet been adapted to the development the sector is going through. Comparable tax bottlenecks arise with IKC directors who are seconded. Fortunately, these bottlenecks can be solved and there are opportunities to prevent VAT. It is necessary to address this in time.’ Van der Plas says Van Ree is committed to a wider VAT exemption in these situations. “In some situations, the economic interdependence and the magnitude of mutual cash flows is even greater,” he adds. “For example, when there is cooperation in the form of a holding structure or administrative merger. VAT risks can be significant. A fiscal entity can then offer a solution, but there are strict conditions attached to it. It is important that you as a childcare organization are well informed about the (un)possibility. Our experience is that arranging well in advance can prevent many problems afterwards.’

“Legislation must stimulate cooperation and not slow it down”

Dot on the horizon

The sector organizations such as BK, BMK, PO-raad and VNG are aware of these and other bottlenecks. According to Van der Plas, it is clear that the sector is on the threshold of major changes. “The course is ready. Legislation must stimulate cooperation, not hinder it. We predict that the two sectors will continue to grow closer together in the coming years. With direct funding for childcare, as is already the case for educational institutions, the new cabinet is taking the next step. As a specialist in the sector, we are convinced that direct funding will be accompanied by accountability requirements for this direct funding.’

Van Ree Accountants is a large national accounting and tax advisory firm with seven departments. This organization has extensive experience in the non-profit, education and childcare sectors and the forms of cooperation between these sectors. www.vanreeaccountant​s.​nl​

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