Parents could have access to more affordable and better quality childcare services following a change in how government grants for pre-school anchor operators are awarded.

The grants, which are currently only available for the PAP Community Foundation and the National Trades Union Congress' My First Skool, will now be open to commercial pre-school operators as long as they set up a distinct company to ensure that the Government funds are used to benefit needy children and uplift the sector instead of boosting their profits.

Pre-school operators will also have to adhere to fee caps for their programmes. For example, the fees are a full-day childcare programme cannot exceed $720. These moves are part of the Government plans to increase pre-school places by 20,000 by 2018. A total of $3 billion will be pumped into the sector in the next five years.

Pre-school operators here have been watching closely the plan to expand the number of operators entitled to government grants, which could lead to a shake-up in the industry.