‘If childcare is free then fund it’ – preschool providers send strong message to government

Politicians have been urged to invest more money in childcare as figures indicate thousands of nurseries and childminders are closing. 'Photo credit: Brian Lawless/PA Wire
Politicians have been urged to invest more money in childcare as figures indicate thousands of nurseries and childminders are closing. 'Photo credit: Brian Lawless/PA Wire
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NURSERY providers and professionals across the county have hit out at the government over a chronic under funding of preschool provision.

The message comes as Ofsted have revealed that between January and March this year an average of 179 nurseries and pre-schools across England closed each month.

Rob Allman, business and operations manager at Good Manors Day Nurseries.

Rob Allman, business and operations manager at Good Manors Day Nurseries.

Lucy Whitehead, who runs the award winning Rainbow Corner Day Nursery, said: ‘These figures come as no surprise. Funding from central government, which has been frozen since 2017, is a huge problem. In that time, everything has gone up – minimum wage, cost of resources and and business rates. Year on year in real terms nurseries have been losing money to the point where it becomes unsustainable.’

Rob Allman, business and operations manager at Good Manors Day Nurseries, which has two nurseries in Fareham and one in Portsmouth, added: ‘The pressure margins have been squeezed on nurseries to the point where for some smaller providers it simply can’t be absorbed. Every year costs get higher while funding has been frozen.’

Early years practitioners say the introduction 30 hours of ‘free childcare’, which was launched in September 2017, is the tipping point for many nurseries and pre-schools. Under the current system, three and four-year-olds in England, along with disadvantaged two-year-olds, are eligible for up to 30 hours a week of free care.

However, providers have said money from central government and the costs to care for a child simply “don’t add up”.

Cheryl Hadland is the managing director of Tops Day Nurseries, which runs sites in Southsea, Copnor, Havant, at Queen Alexandra Hospital, Lakeside Northarbour and across Hampshire and the south, said: ‘Before even factoring in any profit margin we have calculated that to care for a three-to-four-year-old works out at £5.45 per hour yet the money we get allocated is £4.28, leaving us a deficit of £1.17 per child per hour.

‘This cost then has to be passed on to the parents, many of whom can’t afford it. When free childcare was at 15 hours we could absorb some of this shortfall but with this having doubled many nurseries can no longer do so. It’s no wonder the National Day Nurseries Association have said that since this change there has been a 47 per cent increase in nursery closures.’

It has been a similar situation for independent child minders with on average 390 each month having to close in 2018. 

Buckland childminder Kara Jewell said: ‘I get a funding allocation of £4.17 per child per hour at a ratio of one adult to three children which works out as £12.51. Even accounting for the minimum wage that only leaves a couple of pounds to cover resources, insurance and other costs. Central government needs to realise that the current funding formula needs to be adjusted in line with inflation and any future changes to costs such as minimum wage and pension contributions.’

Providers are also annoyed about the disparity in preschool funding allocations given to different local authorities. Figures show national per child funding for preschool three and four-year-olds stands at £4.78 per hour, while Portsmouth and Hampshire children receive £4.69 and £4.61 respectively. Camden and Tower Hamlets receive almost double this amount with per child funding of £8.51 and £8.06.

With a review due to take place next year, early years professionals are urging the government to redress this balance.

Lucy said: ‘While I accept living costs in London are more expensive there are still massive inconsistencies in what each authority is allocated when we are all providing exactly the same service.’

Cheryl added: ‘The government also needs to be more realistic in its use of data. For 2015 calculations they used average wage calculations from 2013 and costs from 2012 – this was not therefore representative of the current time.’

The publicising of ‘free childcare’ has also led to unrealistic expectations of parents when faced with the reality of childcare costs.

Cheryl added: ‘The current situation is misleading. If the government is going to advertise childcare as free then they should ensure it is fully funded otherwise they should not publicise it as such.’

READ MORE: ‘Show us the money’ – Portsmouth and Hampshire headteachers send a strong message to prime minister Boris Johnson

The government has defended the number of nursery closures as it doesn’t account for new providers and has also pledged to increase its current levels of funding.

A Department for Education spokeswoman said: ‘These figures only provide a partial picture and don't take into account new providers joining the early years register. We also know that the number of childcare places available has remained broadly stable. We are increasing our hourly funding rates for councils so that they can continue to deliver free childcare places and over one million children every year are now benefiting from the government's record investment in childcare and early years education.’

On October 31 the government unveiled its new funding allocations for 2020 to 2021. Hampshire and Portsmouth children aged three and four are to receive 8p more per child per hour, rising to £4.69 and £4.77 respectively while funding for two-year-olds will also increase from by the same amount rising from £5.43 to £5.51 in both local authorities.

Kara said: ‘While this is welcome news it’s unclear whether this money will stay within local authorities costs or be passed on to providers.’ 

The National Education Union have described the increase as an ‘insult’ and have said ‘£230m is needed to restore cuts to early years provision in order to stop providers having to close down’.