Warning that nurseries could opt out of free childcare scheme

Nurseries could opt out of the free 30 hours childcare for three and four years, a leading preschool organisation has claimed.

The Pre-School Learning Alliance says there are big concerns that funding for the scheme, to be rolled out nationally next year, could mean some nurseries can’t afford to offer it.

Pilots due to start in some areas next month show some nurseries have decided to charge parents for meals and special activities. Under the scheme they cannot charge for the childcare element.

Currently three and four year olds can access 15 free hours of childcare. From 2017, parents who work over 16 hours a week – whether on an employed or self-employed basis – and earn the national minimum wage [at least £115.20 a week for over 25s], but under £100,000 a year will be able to access an additional 15 hours of free childcare.

The Public Accounts Committee warned earlier this year that the proposals to double free childcare for some three and four year olds might be in jeopardy because there may not be enough providers willing to provide the additional free childcare. It said the Department should use pilots of the new entitlement “to test providers’ capacity to meet the expected demand…and assess how feasible it is for providers to operate with the new funding rates”, although it says there will be little time to evaluate the results and implement any lessons learned before the new entitlement is rolled out nationally.

After originally saying that it would offer childcare providers an average of £4.88 an hour to cover the 15 extra hours of free childcare, the Government reportedly told nurseries in York – the largest of the eight pilot areas – that they would get £3.95 an hour with the first 15 hours will remain at the £3.38 rate it has been for the last four years. That prompted more than 30 childcare providers in York to vote not to take part in the pilot in early May.

Since then York City Council has been told it will receive a flat rate of £4 an hour for the pilot. In June the Government finished a consultation on funding the free childcare scheme and is currently analysing the results.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said: “While the current funding consultation is a welcome first step, these proposals alone aren’t enough to address the challenges facing the childcare sector. Distributing early years funding more effectively is, of course, positive, but if there isn’t enough in the funding pot to begin with, this can only ever be of limited benefit.

“As the Department for Education itself has acknowledged, if childcare providers find that they’ll be financially worse off by delivering the 30 hours, many will simply opt out of the scheme. Unless the government ensures that funding actually covers the cost of providing free childcare – and will continue to do so over the years to come – this is exactly what will happen.

“As such, we will continue to work to ensure that providers get a fair deal on funding. Anything less could not only threaten their sustainability, but also mean that families across the country find themselves without the free childcare they’ve been promised come next September.”

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