Childcare pledge will ‘force providers to close’

Childcare pledge will ‘force providers to close’

The Conservative party’s intention to double free childcare for three and four-year-olds will have a negative impact on the capacity, quality and diversity of early years’ settings, including those based in schools, says one provider.

Sue Cowley, who runs a voluntary pre-school, believes that David Cameron’s pledge of £350m this week to extend free childcare to 30 hours a week for working families will push providers’ costs up and force some to close.

The amount early years’ providers get in funding for free places has not gone up in seven years, with providers in Ms Cowley’s area of Somerset getting “roughly £3.50” an hour per child from local authorities.

“This has just not been thought through,” she said. “There is a gap between the amount we get from government and the actual cost to us of providing the places. The main problem is that the overheads have gone up in the past few years.”

Pre-schools are currently using funds from parents who pay for provision to offset the cost of providing “free” places funded at the lower government rate, Ms Crowley says.

“This is a problem for settings and staff because at the moment if we are going to have to offer 30 hours at this [government] funded rate, then it means we will get less money in from unfunded places, so we can’t top up our income.

“Businesses are being asked to provide a service at less than it will cost. I think what would happen is that settings like ours will end up closing.”

Large chains of providers with more staff and capacity “would be the only way to make this work”, she said, but this would not enable a personalised local service.

Last year the government said school-led nurseries were at the heart of its plans, and encouraged schools to consider teaming up with private, voluntary and independent nurseries.

But Ms Cowley said schools were already running into problems with delivering free childcare places for two-year-olds, which had been extended by the coalition.

An evaluation published in January of early years’ provision for this age group, carried out for the Department for Education, found that of 47 projects, 14 would only become sustainable after a few years and nine did not expect to become sustainable.

A spokesperson for the Conservative party told Schools Week: “Payments vary between areas and different types of providers. At present the average that central government pays to local authorities per hour is £4.50.

“But we know the amount local authorities take from this varies, which is why we now publish an annual benchmarking tool that lists every council’s funding and how much they pass on. This gives greater transparency to parents.

“A Conservative government will start building capacity in the sector from this year, including capital funding for new nursery provision in schools. We will also consult on the right level of hourly funding rates paid to providers in different parts of the country.”