‘Parents could end up paying for funding gap in nurseries’

childminders looking after kids

 

Parents could end up paying for a funding crisis over the government’s plans for free nursery places, a campaign group has warned.

The warning from the Pre-School Learning Alliance comes as a raft of reports show nurseries are facing both staffing and funding problems. The Alliance says government funding for free hours of childcare has not kept up with inflation, has been frozen or has decreased.

It filed Freedom of Information requests asking local authorities for average local early years funding rates in 2011/2012 and in 2016/2017. Of the 107 local authorities who provided the information, 80 (74.8%) reported that funding rates have failed to keep up with inflation over the five-year period, including 23 (21.5%) areas where funding has either been frozen (9.3%), or actually decreased (12.1%).

Neil Leitch, chief executive of the Alliance, warned that the funding gap puts in doubt the governments’s plan to double the amount of free funding for three and four year olds. He said: “The government’s failure to ensure that funding for the so-called free childcare offer keeps up with the rising cost of delivering places is what has led to rising childcare costs over recent years. So it beggars belief that it thinks that a one-off increase in funding rates is enough to sustain the sector for the next three years.

“Take staff costs, for example, which account for 70-80% of overall costs for providers. By 2020, the national living wage will have increased from £7.20 to £9 an hour, and yet childcare providers are somehow expected to be able to meet these rising wage costs on the same funding they will have been receiving since 2017.

“If rising business costs aren’t matched by increases in funding, providers will once again have to choose between increasing the cost of paid-for hours or going out of business. Either way it will be parents or providers who end up paying for a promise that government made.”

The Alliance is launching a new campaign calling on the government to ensure that early years funding rises in line with rising delivery costs, as the government prepares to freeze average rates until 2019-20 after the next year’s increase.

The Fair Future Funding campaign calls on the government to:

  • introduce a statutory requirement on local authorities to collect annual data from local providers on the cost of delivering free entitlement places
  • undertake an annual review of free entitlement funding levels and how they compare to the cost of delivering places using this data, increasing funding when and where necessary.

Local authorities currently use an Early Years Single Funding Formula to calculate local funding rates, which was introduced on the premise that councils would monitor provider delivery costs on an ongoing basis to ensure that funding remained adequate. However, the Alliance says Freedom of Information requests filed to each local authority in England reveal that 65% of councils have not collected any data on the cost of delivering funded places in the last five years.

The most commonly cited reasons for not collecting this data were:

  • Funding from central government has not changed in this time
  • There is no statutory requirement to collect this information.

Leitch said: “The move to 30 hours is a huge change for the sector. Unless it is funded properly, it simply cannot work in the long term. The only way the government can achieve this is to understand how much it costs to deliver quality care and education and then ensure that funding levels match this.

“We know that government previously attempted to gather data on delivery costs, but as a result of asking providers to give ‘any information they felt was relevant’, wasn’t able to use the responses received. We believe that local authorities are far better placed to collect this data, and that government should work with them to ensure this information is collected.

“Of course, the information in and of itself is of no use unless someone is willing to act on it. Ultimately, it’s the government’s responsibility to ensure that it is meeting the full cost of the pledge it made.”

The Alliance’s Freedom of Information requests also asked for average local early years funding rates in 2011/2012 and in 2016/2017. Of the 107 local authorities who provided this information, 80 (74.8%) reported that funding rates have failed to keep up with inflation over this five-year period, including 23 (21.5%) areas where funding has either been frozen (9.3%), or actually decreased (12.1%).

Another report by the Save our Early Years campaign warns of a staffing crisis in nurseries. Since 2014 the government has said nursery workers who count in child to staff ratios need to have at least a grade C in English and maths GCSE.  The campaign says figures from Ofqual show a 30% drop in the number of students completing the Level 3 Early Years Educator course, which requires students to have grades A to C in GCSE maths and English.

Meanwhile, a survey of 278 private nursery owners and managers across England by the National Day Nurseries Association shows many nursery staff are leaving their jobs with the main reasons given being low pay and a lack of progression due mainly to the GCSE requirements.

Purnima Tanuku, chief executive of the NDNA, said: “The serious staffing problems caused largely by these GCSE requirements can make these businesses unsustainable and force them to turn away children.”

 



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