‘Nearly three in 10 childcare providers can’t afford to offer the 30 hours ‘free’ childcare’

Only a third of childcare providers who offer the 30 hours free childcare for three and four year olds are not charging top-up fees and charges, nearly 30% are unable to offer the free hours and 38% who do are not sure they will be able to continue to do so next year, according to a survey by the Pre-school Learning Alliance.

According to an online survey of 1,662 nurseries, pre-schools and childminders in England,  35% are delivering 30 hours places ‘completely free’ to all parents, with a further 36% delivering fully free places to some, but not all, parents and 28% of providers delivering no fully free places. Some 37% of respondents said they had introduced or increased charges for additional goods/services as a result of the 30-hour offer, including for items such as meals and snacks (80%).

Moreover, 66% said they plan to make changes to how they offer the 30 hours over the next 12 months – most commonly by increasing fees and charges.

The findings follow repeated warnings from childcare providers that current funding levels – frozen by the government until 2020 – are too low, meaning that many are being forced to rely on additional charges to parents to fill the funding gap or risk going out of business.

The survey also reveals that a fifth (21%) of childcare providers do not think their business will be sustainable in a year’s time due to government underfunding and over half (55%) of respondents say their funding rate is both less than their hourly parental fee rate and less than the hourly cost of delivering a place.

More than three-quarters of providers (77%) say that if their funding rate stays the same next year, it will have a negative impact on their provision, with 44% of all respondents saying it would have a significant negative impact. With extra costs coming in such as the rise in the national living wage and the funding rate being frozen, over a third of providers [38%] who now offer the 30 hours are not sure they can continue to do so next year.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said:  “With the majority of providers forced to limit the number of genuinely ‘free’ childcare places on offer, and many set to increase additional charges for funded hours in the next year, it’s clear from these findings that the government’s flagship childcare policy is failing both providers and parents.

“Respondents have laid out in black and white that the 30 hours policy is simply not working, with a continued lack of adequate funding leaving many with no option but to pass the funding shortfall on to parents. This has left parents to pay the price for government underfunding through often unexpected charges for things like nappies, food and trips, while the government continues to claim that it’s delivering on its promise of ‘free’ childcare. Worse still, with early years funding rates set to be frozen until 2020 despite inevitable rises in childcare business costs such as wages, rents and pensions, the pressure on providers – and, in turn, parents – is only going to get worse.”

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