THE BLOG

The Cold, Hard Cash and the Balancing of Books - the Truth about UK Childcare

11/08/2015 15:28 BST | Updated 10/08/2016 10:59 BST

My job is to represent the armies of talented and hard-working people who care for and educate very young children in the UK.

It could look like a warm and cuddly arena more concerned with sand pits and nap times than spreadsheets and bottom lines.

Yet I spend most of my time talking about cold, hard cash and the balancing of books.

I say this constantly, but here's a recap. Nurseries are chronically underfunded to deliver the current 15 free hours per week for three and four-year-olds, and 40% of two-year-olds.

The Government plans to double this provision to 30 hours per week for three and four-year-olds with working parents. Pilots are starting next year and full roll-out will follow in 2017.

Nurseries were already very concerned that more free hours would mean bigger losses, then the National Living Wage was announced in the Summer Budget.

Now they are extremely worried.

Lots of people who work in childcare earn the current National Minimum Wage or just above. Yes, it's an important job and they should earn more but this is the reality due to current Government funding levels and the balancing of those books I mentioned.

NDNA knew National Living Wage would have a big impact on nursery pay rolls so we surveyed our members to ask how much.

More than 300 nurseries responded and together they told us that our pay roll costs would be pushed up by 10% in April and 35% from 2020 when the plan is for everyone aged over 25 in the UK to earn £9 per hour. You can read the results in full here.

Nurseries need significantly more money than the £3.80 they get per hour, on average, through their local authorities, to fund the Government's free places.

The Department for Education understands this and a review into the funding of nurseries is well under way. A call for evidence from the sector has just closed. Our survey, and lots of other material from NDNA, forms part of that.

This underfunding is the sector's single, biggest problem.

So, our hopes are pinned on the funding review.

But this is just one stage of the process.

After the review findings are announced, next will come negotiations with HM Treasury.

Chancellor George Osborne will be asked release more money at a time when non-protected Government budgets are being cut by 40%

But he must remember that unless more money flows nurseries' way, these highest of high-profile Government policies that garnered so many votes in the General Election will be undermined.

NDNA knows that hundreds of thousands of working families are ready and waiting to take up more free childcare. They told us so in another recent survey.

Now, the risk is that they could be disappointed if nurseries limit free places to avoid making bigger losses.

No-one who runs a nursery expects to make big profits. But we just can't do good-quality childcare on the cheap and who on earth would want us to?

Imagine what would happen if nurseries got a fair increase in funding.

They'd be able to expand with confidence and offer as many free places as parents needed.

Families would get a good choice of settings. Nursery owners and managers would be able to reward their staff properly and invest in their training and development.

There would be sufficient money. It would all be doable. Maybe I'd even get to talk more about sandpits and nap times occasionally.

Imagine that! And keep your fingers crossed.