There have been a lot of reports on what the Government’s new childcare policies mean for childcare providers.
As the 30 hours free childcare policy for three and four year olds came in at the start of September, the Preschool Learning Alliance published the findings of its survey of childcare providers which showed many nurseries will be forced to charge for extras or raise fees or could face closure because the funding offered by Government doesn’t cover the full cost of providing the hours.
But what do this and the Government’s other policy – tax-free childcare – mean for parents?
The 30 free hours a week childcare is available to parents in England. To be eligible, both parents have to work. Each has to earn the equivalent of over 16 hours a week at minimum wage – whether on an employed or self-employed basis – but under £100,000 a year. The extension doubles the previous offering of 15 hours a week free childcare for all parents of three and four year olds. Parents can claim the 30 hours in term time or they can stretch the offering to cover the holidays which means around 22 hours are free.
Tax-free childcare is a system whereby parents pay upfront into an online childcare account and claim back up to 20% of the cost from the Government. It will be available for eligible parents of children under 12 [17 if the child is disabled] by the end of the year, having been rolled out nationally since April.
Workingmums.co.uk asked eligible parents about their experience of both policies so far. The 30 free hours was the policy which most knew about. Parents need to register on the Government’s site. The picture is mixed.
Some parents had registered for the free hours, but found out that their nursery did not offer them. While they can look for other providers and split the hours between providers, some have told Workingmums.co.uk that they don’t want to unsettle their children by moving them.
Alex said her nursery couldn’t afford to offer the 30 hours, but that she didn’t want to change nursery because it was a specialist Montessori one and also the cheapest she had found. Her childcare bill with two children under three is nearly as much as her rent. She said: “I can’t afford as much childcare as I need, so I juggle what I can get with my full-time job, working from home. Lack of affordable childcare is a huge problem for me. Having these 30 would change my life. It’s a shame I won’t get them and it’s a shame it only kicks in at the age of three.”
Vicky also found that her nursery where her son has been since a baby couldn’t afford to offer the 30 hours. She has had to take him out of the nursery and send him to a preschool that can afford the free hours, but is only open six hours a day. That means she has had to change her work hours and get help elsewhere. She adds that because she worked three days a week it was impossible to find any nurseries in her area which could afford to offer anything other than a maximum of six hours over five days. “That is unworkable for me,” she says. “It makes me cross the Government say they are helping, but have made it worse for us. We can only use 15 hours as I work three days a week. I could send my son on my days off but that is not something I would choose to do for many reasons. If this funding is to get people working then they need to fund it honestly for full working days in settings open for long days. The new scheme has had a huge impact on us having to remove my son from our local nursery. This has also further impacted my career due to changing my hours and unsettled my son.”
People’s experience of accessing the free hours varied. Some found it very easy, but Charlotte Marshall said it took her 45 minutes to complete registration. Another mum said that she had to contact HMRC to make changes to her personal details and then restart the process. Ethne Tooby complained of having to make multiple calls when the pilot scheme began in Leicestershire. She said: “I had to call the local authority to register; one person was answering one number for the entire county. It took about 70 calls to get through! I have renewed for this term online, via my Government Gateway account which was a doddle.”
For those who could find providers offering the hours, the impact on their work patterns depended on individual circumstances. Some said they planned to increase their hours as a result, some said it meant they could return to work and others that they could work less anti-social hours, but for many it just meant they could afford extras or would not have to rely on family so much.
Lisa Eldridge, who is currently bank staff and on a zero hours contract, said having her son in nursery for more hours meant she could increase his time in childcare from 7.5 hours a week to 23 hours a week spread over the year. That meant she would be available to do more shifts and would save £100 on nursery fees. She would also be able to apply for contract work or work during nursery hours rather than just at weekends and in the evenings. “We will be financially better off, but also emotionally better off as we will have increased family time together,” she said.
Nicola, who will save £380 a month on childcare costs, said: “It makes an incredible difference. This year we are holidaying on a Sun £9.50 holiday. but next year we can save to help keep our old car on the road or exchange it.”
Single mum Kerensa Airey commented: “Receiving the 30 hours has made a massive impact on my finances. As a single mum money is incredibly tight, my largest outgoing being childcare at around £900 a month. This means I won’t have to worry so much about being able to pay the bills and buy food every month.”
Others who already worked full time said it took the pressure off them, meaning that they might even reduce hours or overtime, and in some cases it made it more likely that they could afford to try for a second child earlier.
Lucy is on maternity leave with her third child. She has a five and a three year old and is the main earner in her family. She says: “Having worked full time after each of my first two children, and paid in excess of £1,200 each month when both my boys were in nursery, the difference means that my three year old’s nursery fees are sorted until he begins school next September. This is a welcome financial break for us as a family because, as the main earner in our household and being on maternity leave, our finances will be greatly reduced over the next six months.”
For others it meant they could afford to change course. Emma Willder has been able to leave her job. “It has had a big financial impact, enabling me to be self employed. In addition the 20% government funding [for the tax-free childcare] has helped further. My nursery fees have reduced by over 50%.”
Charging for extras
Some mums said their nursery was charging extras for things like food. Heidi Nuttall said her nursery charged around £11 per day for food and that they had increased fees by £70 per month this year for full time care, citing the 15/30 hour schemes as part of the reason. The 30 hours means she gets a £380 reduction on a bill of £1,050 per month.
Many were unclear about whether their provider would increase fees for younger children or for additional hours on top of the 30.
Some said their nursery only allowed them to take the hours in two blocks of three hours per day so if they worked, for instance, three full days a week they could only access a maximum of 18 hours and had to pay for any hours outside the six they could claim.
Some who found that their nursery did not offer the 30 hours were splitting them with another provider. Kathryn Vaughan, who is on maternity leave with her second child, said: “It was difficult finding the second provider and speaking to private nurseries they seemed put off when I mentioned the funded hours. We finally found a local childminder who was very helpful and helped to explain how it all worked.” She is using a nursery five mornings a week and a childminder for two afternoons. The childminder is charging a top-up of around £175 for the whole academic year, which she will claim childcare vouchers to cover.
Several parents made the point that they needed free hours from the early years so they could stay in work, not just when their child turned three. Some have had to drop out of the workplace due to childcare costs when their children were younger so do not qualify yet for the free hours. Oyinlola Aderemi said she hasn’t applied for the 30 hours yet “because the requirement is that both me and my husband must be working. My husband currently works, but I had to stop work since 2015 to look after my kids due to high childcare costs”.
Wales, Scotland and Northern Ireland
Mums in different parts of the UK complained that they couldn’t access the free hours yet.
Wales doesn’t offer the 30 hours nationally yet, but is piloting them in some areas with a view to rolling this out across the country for 48 weeks a year. Currently families of three year olds can only get up to 10 hours of free childcare for 38 weeks, capped at two hours a day. One mum, Teleri, says she has two English friends who used to live in Cardiff, but moved back to England just to benefit from the childcare support.
She says she is delaying having a second child due to the cost of childcare for two children at nursery. She says: “If we are fortunate to have another child, there will be at least three-year gap between them.”
That means that, as an older mum, she is worried that she might find it hard to get pregnant again. If the 30 free hours was available in Wales, she could try for a second baby sooner and potentially reduce her full-time hours to 30 hours a week as well as having more income to spend on things like a family holiday abroad.
Northern Ireland also doesn’t offer the 30 hours. Parents can only get up to 12.5 hours per week of free preschool education, capped at 2.5 hours per day during term time. Scotland offers 15 hours for 38 weeks to all three and four year olds and will double this by 2020.
There was also a lot of confusion around tax-free childcare. Many parents confused the policy with childcare vouchers or simply hadn’t heard of it. Those who tried to register said it was a difficult process and many had questions about how it worked, for instance, when the money they paid upfront would be topped up by the government. Mums described lots of phone calls to verify information and a lack of online support. Julia Semple said: “Although we now have a tax-free childcare account for one of our daughters, we have felt that there is very little information available about this scheme and as a result still don’t really understand how it will work. We also found the application process overly onerous – even just trying to sign into the government childcare site isn’t straightforward!”
*More information on the childcare policies can be found here.