‘44% of childcare providers receive less funding than five years ago’

More than two in every five nurseries, pre-schools and childminders in England are receiving less funding, in real-terms, than they were five years ago, according to a new report.

Campaigners say this will mean higher costs for parents in the coming years.

The report by Ceeda is based on its annual survey which also shows that less than half of the 30-hours extended childcare places for three and four year olds are totally free and that the number of childcare places overall has dropped in particular for those from the most deprived areas.

The survey, based on replies from over 1,900 nurseries and 444 childminders, found there were 0.33 nursery places for children in the most deprived areas in 2016. This has now fallen to 0.25 places.

The report also shows that private, voluntary and independent nurseries face a funding gap of 616m pounds in 2018/19. It says that while funding rates for three and four year olds have risen – but only by 1.8% since 2013/14 in real terms, they have fallen by 8.5% over the same period for two year olds. This is in part due to the fact costs of caring for children under two are on average 46% higher than for three and four year olds, but fees only differ by around 7%.

The report shows providers have trouble keeping and recruiting staff – 84% said they found vacancies hard to fill. Low pay is one of the big issues with nursery managers paid 13.43 pound an hour compared to 21.74 pounds in equivalent roles in the same occupational class.

If funding levels remain the same to 2020, says the report, the pressure on nursery finances will increase. The report says lower unemployment is putting pressure to increase wages generally, but nurseries cannot afford to do so without raising prices.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said:”Without change, we’re going to see parents facing ever-rising childcare costs as nurseries, pre-schools and childminders are forced to increase fees and additional charges in order to plug this growing funding gap – and, in the worse cases, providers who simply cannot make the books balance will be forced to close their doors for good. This isn’t an exaggeration; it’s already happening.

“The Autumn Budget is a critical opportunity for the government to address this issue once and for all. As such, we hope the Chancellor will commit to delivering the funding that the early years sector needs, not just today, but in the long term.”

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