Last year the Government launched a childcare boost for working parents in the form of 30 hours free childcare for working parents. Editor Victoria Galligan looks at how the grant scheme has changed the childcare industry in the last 12 months.

In April 2017, nearly 18,000 places were offered by nurseries and other childcare providers, at a cost of £55million to the taxpayer. The aim was to get more parents – especially women – back into work after having children, and to encourage them to work longer hours without struggling to pay for childcare. 

Another focus of the Government’s was children’s development and attainment – its Childcare Bill Policy Statement published in December 2015 stated, “It is the quality of provision that really makes the difference – cognitive benefits of childcare disappear by age ten if a setting is low quality, while children attending high-quality provision for two or three years before school have a seven- to eight-month developmental advantage in literacy compared to their peers.”

With over 90% of three- and four-year-olds taking up the previously available 15 hours of free childcare, the Government increased the hours for eligible working parents with Extended Free Entitlement (EFE) and places were quickly taken up. By autumn 2017 around 202,800 children were in a 30 hours place – which the Government funded at £3.77 an hour per child.

Despite many reporting glitches in the funding application website, which resulted in money being held in tax-free accounts without being passed on to the childcare providers for some time, nurseries were filling with three and four-year-olds. Other providers struggled to register their setting with the Government and reported waiting months for the relevant paperwork to go through.

Some childcare providers were reluctant to join the scheme as their fees would not be met by the Government funding, and one nursery owner took to social media to explain her situation. On the Facebook group “Champagne Nurseries On Lemonade Funding”, one owner of a Sheffield nursery wrote about putting in place an additional charge along with new session times which said was due to the new EFE funding. The owner added, “All we want is the hourly rate that we were charging at the time this parental incentive was introduced. My heart goes out to all nurseries and childminders who have lost hope and are no longer in business from this 30 hours not FREE but FUNDED system.”

Then this week, the Pre-school Learning Alliance published information about the widespread practice of nurseries charging additional fees to make up the shortfall of income – with two thirds of the 30 hours free childcare1,600 childcare providers surveyed saying they charge for extras. The survey also found that if current funding levels remained frozen by the Government until 2020 as planned, many risked going out of business. 

The Pre-school Learning Alliance findings showed:

  • 28% of providers delivered no fully free places.
  • 37% of respondents have introduced or increased charges for additional goods/services as a result of the 30-hour offer
  • Two-thirds of providers (66%) plan to make changes to how they offer the 30 hours over the next 12 months – most commonly by increasing fees and charges.
  • A fifth (21%) of childcare providers do not think their business will be sustainable in a year’s time due to Government underfunding.

Responding to the findings, Neil Leitch, chief executive of the Pre-school Learning Alliance, said: “It’s clear from these findings that the Government’s flagship childcare policy is failing both providers and parents. Respondents have laid out in black and white that the 30 hours policy is simply not working, with a continued lack of adequate funding leaving many with no option but to pass the funding shortfall on to parents.This has left parents to pay the price for Government underfunding through often unexpected charges for things like nappies, food and trips, while the Government continues to claim that it’s delivering on its promise of ‘free’ childcare.

“Worse still, with early years funding rates set to be frozen until 2020 despite inevitable rises in childcare business costs such as wages, rents and pensions, the pressure on providers – and, in turn, parents – is only going to get worse. Since the announcement of the 30 hours, the childcare sector has been very clear that, without sufficient funding, the scheme simply will not be viable in the long term – and thousands of parents and providers have now joined the Alliance’s Fair Future Funding campaign to demonstrate their concerns.   

“The Government should not have needed more evidence of a childcare funding crisis – but here it is. If ministers don’t want to leave parents picking up their tab or to risk forcing even more providers to close, they need to recognise that the current situation is unsustainable and increase funding so it meets the cost of delivering places as a matter of urgency.”

There is no doubt that many working parents have benefited from the 30 hours funding, allowing them to go back to work without the worry of paying expensive childcare fees. For many, especially women, going back to work after having children simply wouldn’t be financially viable if the funding wasn’t available. And despite the shortfall in funding, nurseries have filled empty spaces and been able to take on more staff to cope.

However, the £3.77 per hour – which is not set to rise any time soon – is clearly not allowing nurseries to offer the “high-quality provision” which the Government itself recommended in 2015. 

A Department for Education spokeswoman said: “We are investing a record amount of around £6billion every year by 2020 in childcare and have doubled the free childcare available to working parents to 30 hours a week, saving them up to £5,000 a year per child.

“Providers can choose whether to offer 30 hours and what pattern of days and hours they offer parents. We have always been clear that Government funding is not intended to cover the costs of meals or additional services. However, while providers can charge parents for additional extras, this cannot be a condition of the child’s place.”