‘Underfunding of 30 hours means fewer childcare places and higher costs’

Parents in England face rising childcare costs and a squeeze on places as a result of government underfunding, according to a new survey.

The survey of around 1,400 nurseries, pre-schools and childminders from the Pre-school Learning Alliance found that, as a result of the Government’s 30-hour scheme for three and four year olds 49% of childcare providers plan to increase how much they charge for additional (non-funded) hours; 52% plan to make changes to what they charge for goods and services, including introducing or increasing charges for meals and snacks (37%) and introducing or increasing charges for trips (20%);  42% don’t feel confident they have enough places to meet demand; and 38% don’t think they’ll be sustainable in 12 months’ time.

Around three-quarters of childcare providers say their current funding rate is less than the cost of providing a place, citing an average shortfall of 18%.

The 30 hour ‘free childcare’ scheme has been criticised by childcare providers who say the money being provided by government does not cover the full cost of a place.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said: “As one of the government’s flagship policies, the launch of the 30-hours offer should have been a day of celebration. Instead, all we have is a policy in chaos.

“The government’s total refusal to tackle, or even acknowledge, the fundamental problem of early years underfunding has left providers across the country struggling to find ways of delivering the offer that won’t force them out of business. As a result, parents who expected 30 hours of ‘free childcare’ to take up when and how they wanted, are now facing additional fees and charges and either unexpected restrictions on when they can take up their places, or a struggle to find places altogether. This is a direct consequence of the complete mismanagement of this policy and it is unacceptable for government to continue to turn a blind eye to the situation it has created.

“We cannot wait for this problem to solve itself. Every week we’re hearing of more and more parents struggling to find places that actually suit their childcare needs. Every week we’re hearing of more and more childcare providers being forced to shut down as a result of the 30 hours. This simply cannot continue.

“It’s time for the government to step up, admit it got this wrong, and fix the mess that it has made. Otherwise it will be parents and providers who pay the price.”

One nursery that has closed is Anchors School Nursery in Hampshire. Former principal Eve Wort says: “Our setting closed at the end of the summer term. This was because of the impact of the government’s ‘free’ entitlement offer, in particular the introduction of 30 hours. Our funding was reduced from £4.44 per hour to £4.36 per hour, when our hourly costs are around £6 per hour.

“Without being able to charge supplementary fees, our traditional nursery school operation is not sustainable. I am simply not prepared to sacrifice quality of staff and staff ratios to achieve a cost target, as I do not believe this is in the best interests of the children. It is very sad that this government policy is having such a damaging effect on the diversity of childcare provision.”

Jane Jones of Mulberry Bush Pre-school in Surrey stated: “It has always been our ethos to provide high-quality, affordable and flexible childcare, but the 30 hours offer will mean that we have to compromise on some of these aims. We are only offering the funding for five hours in the afternoon, so parents will have to pay for the morning session at our usual hourly rate. We have also increased our rates for two-year-olds as well as for any additional non-funded hours. We have to do this to remain financially viable. We are not being greedy, we just need to cover our actual costs in order to have a sustainable business model and the current level of funding does not support that. In 21-years working at this pre-school, I have never known such a financially difficult period.”

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