Free childcare plans brought forward amid ‘meltdown’ warning

By The Press Association1st June 2015News EnglandChildcare, Early Years, News England, Nurseries

The childcare system faces “meltdown” unless Government plans to double free places available for working parents are fully funded, an educational charity has warned.

Prime Minister David Cameron will today announce that working parents of three and four-year-olds in some parts of England will be entitled to 30 hours a week from September 2016 as the scheme is rolled out a year earlier than planned.

Ministers say that up to 600,000 families will eventually benefit from the move, worth around £2,500 a year on top of the £2,500 they can already save from existing free childcare offers.

But the Pre-School Learning Alliance, which represents 14,000 private, voluntary and independent groups, warned the existing 15 hours a week of free childcare is already “grossly underfunded” by the Government.

Research for the charity has suggested the total cost to the sector will be approximately £1.95 billion per year, but funding at current rates amounts to £1.7 billion – a potential shortfall of £250 million.

Alliance chief executive Neil Leitch said the charity estimates that at least £354 million in additional funding would be required to deliver the Government’s plans – a 20% increase on the £3.88-an-hour currently available per child.

He said: “We warmly welcome the news that the Government will be launching a formal review into childcare funding rates this year.

“We have long warned that the existing schemes are significantly underfunded, leaving providers and parents to make up the shortfall.”

But he added: “Given that the childcare extension plans have been costed at just £350 million a year – a figure that our research suggests is around a quarter of what is actually needed – we are concerned that the Government is still significantly underestimating the scale of the existing funding shortfall.

“Simply raising funding rates by an arbitrary amount won’t be enough – it is absolutely crucial that the Government ensures that the hourly rate of funding actually covers the cost of delivering funded places.

“Anything less risks destabilising a childcare system that is already struggling to stay afloat.”

Mr Leitch predicted that if more money is not made available, increasing numbers of providers will withdraw from the free childcare system.

He said extending funded hours without first tackling this shortfall would make a bad situation worse, warning the childcare system faces “meltdown” if the Government does not raise the amount it pays providers.

He told the BBC: “I think this is crunch time, I think there will be a meltdown. You will see more and more providers withdrawing from the system and that will undermine and just railroad the entire policy.”

Speaking on the BBC Radio 4 Today programme, Mr Leitch added: “I think we are at breaking point with just the 15 hours. Extend that to 30 and you will see a different position altogether.

“There are many nurseries that can’t physically extend their number of hours. They may operate in a church hall or community centre. Nobody has considered whether in fact they will be able to offer the 30 hours.”

The move to double free childcare for working parents was a key pledge of the Conservative’s general election manifesto.

Speaking ahead of the introduction tomorrow of the Childcare Bill, which will enshrine the measure in law, Mr Cameron said: “My message is clear – this Government is on the side of working people, helping them get on and supporting them at every stage of life.

“That is exactly why we are pressing ahead with these reforms so that not a moment is lost in getting on with the task, going further than ever before to help with childcare costs.”