The childcare debate rumbles on

Despite promises of consultation and increasing childcare rates, many parents and providers are still waiting to see the bottom line.

evidence about childcare

Teacher and adorable children being creative with colorful pencils at kindergarten

Childcare has fallen out of the headlines after a few months of intense focus in the lead-up to the Budget. Basically everyone is waiting to see what the Government is going to pay for childcare places after it announced record investment in the sector. The last few months have been a bit of a rollercoaster for parents. No-one was expecting much from the Budget, after years of little to no announcements on childcare. There were murmurs about increasing funding for families on Universal Credit the weekend before the Budget and then the night before the Chancellor’s speech came news of an expansion of ‘free’ childcare to cover children from nine months up. It sounded too good to be true. And so it turned out. Much of the expansion was not being rolled out for up to two years, meaning it would mainly benefit future parents rather than current ones. Then there was the issue of how much money was needed to fund it properly. Childcare providers are worried that the devil will be in the detail. Expanding places without fully covering the cost of provision could push many of them over the edge, they said. Closures have been increasing since Covid and availability of childcare places is becoming a bigger and bigger issue.

The proof will come when the childcare rates are revealed later in the summer. The minister for children, families and wellbeing, Claire Coutinho, was before the Education Committee yesterday and she said that the hourly rate for three and four year olds will be going up by 7% [which seems like a cut if you take inflation into account and bearing in mind that providers have long complained that the current rate does not cover the full cost of a place] and that the offer for two year olds will increase by 30% from September while under twos – who don’t attract any funding currently – will be allocated around 11 pounds an hour from next year. Coutinho said the figures were calculated based on a ‘robust methodology’, including parent and provider surveys.

One member of the committee remarked that it all sounded good, but that many providers are sceptical. He talked about local authorities not passing on the full amount as freedom of information requests submitted by the National Day Nurseries Association found more than 90 out of 150 local education authorities that responded to a survey underspent by a total of almost £46m last year. Coutinho said that on average local authorities held back less than 5% of childcare funding. It was also reported that in those areas where there was an underspend not many local authorities gave the extra money to providers. This has to be set against a background where local authorities are facing a myriad of funding issues, with the County Councils Network announcing recently that  England’s largest councils will need to make at least £1bn in savings to balance their 2023/24 budgets, despite many of them reluctantly raising council tax. The NDNA wants to see childcare funding ringfenced.

The proof of the pudding on funding will come when we see the childcare rates. What seems clear is that childcare is likely to be a central issue in the general election, which is a bit of a novelty, and with all sorts of questions attached to it. One member of the committee, for instance, who expressed worries about women feeling forced into working due to the childcare spending, questioned how many families would be able to work or increase their hours as a result of the expansion in childcare. 60,000 was the answer. It seemed a fairly low number, although the minister defended the wider and lifelong benefits of early years education.

The discussion also covered take-up of tax-free childcare – which has traditionally been fairly low, but has increased in recent years. The minister said levels of uptake among parents of younger children is higher than for older children which could, she hoped, signal an upward trend. Wraparound childcare also came up, with the minister talking about increased funding, although providers have criticised the lack of consultation with them over its plans for how to boost provision and uptake.

Nevertheless, the Government says it is consulting with childcare providers “constantly”. Coutinho said there would be consultation with childcare providers on the 2024/25 rates in the summer and that the 2023/24 uplifts would be published before the summer break. She said there would also be a review of childcare availability in different local authorities in the next months.

The Early Years Alliance, which represents many childcare providers says it is pleased the minister is planning to consult with the sector before the new rates are revealed, but its CEO Neil Leitch added: “There’s no question that it would have been much more beneficial if they engaged and consulted with the sector before announcing the expansion in the Budget. If it had it would have realised the extreme pressure it was likely to place on a sector already under considerable strain.” He signalled that the sector is slightly wary of government consultations in any event, given that the one held on childcare ratios, which most providers oppose, seems to have been completely ignored. Leitch said: “Words alone are simply not enough. It is vital, therefore, that in the coming weeks and months the early years sector plays a central role in shaping the expansion plans and we look forward to supporting this in anyway we can.”

So we still seem to be no further forward, waiting for the bottom line. Figures and statistics are notoriously open to manipulation in politics. The next few months will show whether the expansion plans are adequately funded or not.

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