THE BLOG

How £6bn Investment In Early Years Boiled Down To A Very Small Change Of 40p

05/07/2017 12:01

30 'free' hours childcare in England has been on the way since May 2015 when this new idea helped the Conservatives to win the general election that year.

It seems like a lifetime ago - before Corbyn, May and Trump rose to prominence and the term Brexit was yet to be invented.

The nursery sector spoke up, loud and clear, about the chronic underfunding of 'free' childcare and how 30 hours couldn't work without more money.

So funding reviews were duly undertaken, with evidence from NDNA and the wider sector, and a record £6bn investment for early years was announced.

On the face of it £6bn sounds like a good chunk of money. But proposed hourly rates per child from the Government to local authorities were published, and seemed, in many cases, pretty meagre, despite such a cash injection.

The real truth is more sobering still and has only just been revealed by NDNA.

The amount being paid to childcare providers will be lower still, when local authority admin costs are taken into account.

NDNA asked all councils in England, under a Freedom of Information request, to tell us how much they would be paying nurseries to deliver 30 hours.

The average answer is just 40p more than they got in 2016/7. For some, it's actually less than they got last year.

The average hourly rate to nurseries is £4.37, up from £3.97 in 2016/7. I've been presenting these figures to delegates from nurseries all over the country at the NDNA Conference and the disappointment in the air has been palpable.

"But, that's still a pay rise!" you might say.

To that, I say yes but this rate is fixed until 2020. It isn't enough now, in a year that Business Rates have risen by a quarter, and it certainly won't be enough in 2020 when the National Living Wage has gone up 20% to £9 per hour.

At the moment, nurseries make an average loss of almost £1,000 per year on each 15 hour place, money that has to be recouped via fees to paying parents.

A 40p increase will dent the debt on a 15-hour place by less than a quarter and definitely doesn't address chronic underfunding in any meaningful way.

The Prime Minister claims austerity is over. The Queen, in her state opening of Parliament, said that her government would work to ensure that schools were fairly funded.

Both these assertions should point to more money for early years - children's first experience of education that is so crucial, so formative.

Let's stop this now and do it properly. Make 'free' childcare truly free and not subsidised by nurseries or families.

Think again and delay 30 hours if necessary. Similar schemes are not due in Scotland or Wales until 2020 so how about England's expanded free childcare is put back, so that when it happens the policy will be strong and stable, to paraphrase Theresa May's catchy election tenet.

On a practical level, and as a short-term fix, if extra funding cannot be found, nurseries must be given the flexibility to make mandatory additional charges - for example, for food or trips.

But ideally, NDNA wants nurseries to be able to balance their books without calling on parents to help them.

If the Government carries on regardless we'll see nurseries either opting out of 30 hours or making bigger losses on funded places.

Some will risk putting themselves out of business, simply for offering parents their 'free' entitlement. And what use is that to the families that the Government so wanted to help?

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