Leamington and Warwick Living Jul - Aug 2023

CHILDCARE EXPANSION
A GAME CHANGER
By Purnima Tanuku OBE, Chief Executive of National Day
Nurseries Association (NDNA)...
When Chancellor Jeremy Hunt
announced “free childcare” for all children
over nine months from working families,
excited parents and expectant couples
were already contacting their local
nurseries.
This announcement is a game-changer
for working parents and their children, but
also for the early years sector. Parents
returning to work after a new baby will
soon have support with childcare costs.
More children will be entitled to high
quality early education and care, which
supports their development and offers
exciting learning opportunities.
But is it as good as it sounds? And what
needs to happen to make it a reality?
Currently, all three and four-year-olds are
entitled to 15 hours of funded childcare
per week for 38 weeks. This doubles to
30 hours for those with working parents
within specific wage limits. Two-year-olds
from disadvantaged backgrounds are
entitled to 15 hours per week.
Around 80% of these “free” places
are delivered by private, voluntary and
independent (PVI) nurseries, with the
rest given by childminders and schools.
Unfortunately these places aren’t free, for
either parents or providers.
Here’s why: the Government offers
free places but then doesn’t give
childcare providers enough money to
even cover costs. This means they
make a loss on each funded place. In
NDNA’s February survey, under 2%
of nurseries said Government funding
covered their delivery costs; 83% will
either make a loss or break even, so
can’t invest in staffing or resources.
This is why childcare costs are so high.
The Government contribution is so low,
nurseries have to put up their fees to
parents to make up the shortfall.
From April 2024, all two-year-olds of
working parents can claim 15 hours of
childcare; this extends to all children who
are nine months old from September
2024. A year later, working parents with
children under five will be entitled to 30
hours.
The Government currently buys around
50% of all childcare in England; this will
rise to around 80%, according to the
Institute for Fiscal Studies. While this is
great news for parents’ budgets, if the
Government does not pay its share, it
could bring the whole system crashing
down.
NDNA research shows that 87% more
nurseries closed between April and
December 2022 compared with the same
period the previous year. Providers’ costs
have rocketed, including staff wages,
energy and food costs, business rates
and VAT. Unfortunately the funding rate
has never kept pace with actual costs or
inflation.
At the time of going to press, early
years providers do not know how many
more children are expected to take up
a place, making it very difficult to plan.
Currently only 86% of PVI nurseries offer
two-year-old places. NDNA’s research
shows that 67% of nurseries would have
to physically expand to increase their
capacity – this takes planning, investment
and time. There is no capital funding
for this, nurseries have exhausted their
reserves through underfunding and time
is running out.
Three quarters of nurseries could only
offer further places if they took on
more staff. A workforce crisis has been
blighting the sector for years, with some
settings closing provision because they
don’t have enough practitioners. NDNA
has asked the Government for support
to raise awareness of early years careers,
providing pathways for development,
funding for qualifications and higher
funding rates to pay staff the salaries they
deserve. Support is patchy at best.
The childcare landscape in England is
set to be transformed. We all want it to
be a success, to support parents and
give children the best start in life. If the
Government invests sufficiently and
works alongside the providers, it will truly
be a game changer. But the Government
must get its sums right from the start
because from September 2025, there will
be no means for nurseries to make up
that shortfall and prices will effectively
be fixed.
For more information, please visit
www.ndna.org.uk
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