Last week saw the end of the Government’s consultation on changes to the way childcare entitlements are funded, with disappointment from hopeful childcare providers and associations.
In September 2017 the Government plans to increase the current entitlement of 15 hours’ free childcare for three- and four-year-olds to 30 hours for an estimated 400,000[i] working families. However, childcare providers have been sceptical about how this ‘free’ childcare is going to be funded, with many fearing the extended entitlement could bankrupt them.
As part of the consultation, the Department for Education (DfE) recognised that the distribution of funding for the current 15-hour entitlement has been “neither fair nor efficient” [ii]. Funding is allocated to local authorities based on historical council spend (which is not an accurate reflection on true provider costs or market prices) and, in addition to this, many local authorities then retain far too much of their allocation as “central spend”. Many providers currently make up for the loss of income from ‘free’ places with increased rates during the hours parents pay for, so it’s little wonder that the promise of 30 hours’ ‘free’ childcare has providers so concerned.
The Government has pledged to invest £300 million per year as a “significant uplift”[iii] to childcare funding rates, but experts say this is not enough to cover the shortfall. Neil Leitch, chief executive of the Pre-school Learning Alliance, said:
“The consultation itself makes the argument that early years funding needs to be two things: sufficient, and distributed efficiently. But while the Government is focusing on the latter point, the former still remains unresolved. If there’s not enough money in the pot, distributing it more effectively can only do so much, and many providers have told us that, at the rates projected by government, it simply won’t be financially viable for them to offer the 30 hours.”
This is likely to leave many parents disappointed, come September 2017.
“It’s time for the Government to come clean on 30 hours” said Mr Leitch.
“Either it needs to fund the offer properly, at a rate that ensures that neither parents nor providers have to incur any additional costs, or it needs to admit that the scheme is not “free” at all, but rather subsidised, and promote it to parents accordingly.”
The DfE has received a number of comments and observations from the public following the consultation, and will be publishing its response in the near future.
To find out more about financial childcare support available to you, read our article on the changing childcare landscape >
[i] An early years national funding formula, Government Consultation, p5
[ii] An early years national funding formula, Government Consultation, p5
[iii] An early years national funding formula, Government Consultation, p3