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Childcare changes threatened by underfunding, providers say

2015-06-01 16:14:05

nursery imageThe prime minister painted using vegetables during his visit to a nursery on Monday

Childcare providers in England say the system is at "breaking point" as plans to double free provision for three and four-year-olds in England are sped up.

The warning from one industry body, the Pre-School Learning Alliance, comes as ministers say trials of the new scheme are being brought forward to 2016.

The current allowance of 570 hours a year for three and four-year-olds will be doubled for working parents.

David Cameron said it would "take time" to get the policy right.

The Pre-School Learning Alliance - which represents 14,000 private, voluntary and independent groups - is warning of "meltdown" in the system because of a shortfall in government funding.

It says the grant for the existing 15 hours falls, on average, around 20% short of the true cost of providing care - £3.88 per hour compared with £4.53.

Employment Minister Priti Patel told the BBC the government accepted "funding rates need to increase" and is launching a consultation on how the policy will work in practice.

'Crunch time'

Currently, all three and four-year-olds in England are entitled to 570 hours of free early education or childcare a year, which works out as 15 hours each week for 38 weeks of the year.

nursery image

The Childcare Bill, announced in last week's Queen's Speech, would double this for working parents with a household income of less than £150,000 - although it is not clear yet how many hours they will have to work in order to qualify.

The change had been due to come into force from September 2017, but some working parents will be entitled to the extra help when pilots begin in September next year.

However, the alliance said many groups were already having to charge parents extra for hours of childcare not included in the scheme to make ends meet, and would struggle to deal with the changes.

"I think this is crunch time," said chief executive Neil Leitch.

"While we of course welcome the drive to improve the availability of childcare in this country, these figures clearly show the government's plan to extend funded childcare hours simply cannot work without a substantial increase in sector funding.

"The so-called 'free' childcare scheme is nothing of the sort. For years now, the initiative has been subsidised by providers and parents because of a lack of adequate government funding."

nursery imageChildcare provision was a key election battleground

Following the announcement, the prime minister visited Buttercups Nursery in Teddington, south-west London.

Kate Thomas, 49, whose three-year-old attends the nursery, said it was worrying that any shortfall in funding for the extra hours might be passed on to parents.

"Most mothers I know don't work full time and if they are lucky they will have a job that covers their childcare and have a bit extra," she said.

"But if that bit extra then ends up being what funds the extra cost of the nursery, what is the point of working?"

'Funding critical'

The National Day Nurseries Association welcomed the doubling of provision, but also said its members were "struggling with current levels of investment" and the consultation "must result in a substantial increase in funding".

"Given the speed of this reform, it is now extremely important that the government starts work with the childcare sector as soon as possible to find practical, workable solutions, addressing all the issues involved," chief executive Purnima Tanuku said.

"Funding is critical and it's vital that the increase pledged by the government is meaningful."

Jill Rutter, from the Family and Childcare Trust, which campaigns for quality childcare that is affordable and accessible, said there was "no proper funding formula".

"The money local authorities get from government to pass on to providers is very varied," she said.

"They get between £9 an hour at the highest and about £3 an hour at the lowest."

Labour's shadow education secretary Tristram Hunt said the Conservative Party "failed to explain how it would fund its childcare offer before the general election", and added: "It remains unclear how they propose to fill the funding gaps in their plans now."

Priti PatelEmployment Minister Priti Patel: "This policy will benefit up to 600,000 households"

Mr Cameron told ITV's This Morning it would "take time" to get the policy right "because obviously we need an expansion of the childcare sector, we need more nurseries, more of these places to open, so we're working with them to expand".

He said the government would start talking to childcare providers immediately "about what's the best way of making sure that they're being properly paid for the childcare that they provide so we can expand the number of places".

The cost to the Treasury was initially estimated at £350 million a year, but Ms Patel said the sums involved were yet to be finalised.

Asked why households with a relatively high income would receive help, she added: "This isn't about subsidising well-off people at all. This is about providing affordable childcare and increasing childcare provision for working families."

Ministers say up to 600,000 families could benefit, saving as much as £5,000 a year.

In Scotland, three and four-year-olds are entitled to up to 600 hours of free early years education or childcare a year, while in Wales, provision is for a minimum of 10 hours a week.

In Northern Ireland, it is limited to four-year-olds only, for up to 12.5 hours a week.

childcare funding stats


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