August 21, 2015
It’s week three of August and we’re still wrestling with 30 hours free childcare. This week, the facts every parent should know and the questions they are asking.
What is it?
The Government has committed to provide 3-4 year olds in the UK with 30 hours of free childcare for 38 weeks a year (during term time), double what’s currently offered.
The scheme to support working families will be available to up to 600,000 families and worth around £5,000 a year – including the £2,500 they can already save from existing free childcare offers.
Plans are being drawn up to introduce the changes for some families a year earlier than planned, with pilots in some areas offering 30 hours worth of free places from September 2016.
What free childcare is available now?
Introduced in September 2013 and now in its second year, currently, all three- and four-year-olds are entitled to 15 hours free childcare a week.
This is funded by the nursery education grant from local authorities of about £3.80 per child, per hour.
Some of the poorest two-year-olds are also entitled to 15 hours free childcare under a separate scheme.
Is the funding enough?
Many nurseries and pre-schools say no. Research by the National Day Nurseries Association from January 2015 suggests funding for every three- or four-year-old falls short by an average of £800 a year. Underfunding has been reported by the NDNA in six successive surveys over the past four years.
Despite rising costs, driven by pay, utilities and business rates, funding paid to nurseries by local authorities has been stagnating, with most local councils giving no increase.
Local authorities set different rates for the hourly nursery grant, the NDNA research suggests £3.80 is the average for nurseries, per child, per hour.
And at about half the national minimum wage, it is clear why nurseries in the independent and voluntary sector are having to get parents to make up the difference.
The Pre-School Learning Alliance says grants for the existing 15 hours fall, on average, 20% short of the true cost.
How do nurseries make up the shortfall?
The short answer is – from parents. However, extra hourly fees are not legal, so nurseries have got round this by requiring parents to take more than the total number of free hours and charging a set fee for the extra time.
Another way is limiting the flexibility of the way sessions are used. For example, requiring parents to use the free hours in specified three-hour sessions, but limiting these to two sessions per day. So a mother needing to cover two full working days, of say nine and a half hours or 19 hours a week, would only be able to use 12 hours of her 15-hour entitlement. And yet she is required to pay the full day rate (pro-rata) for the rest of the hours used.
Nurseries are also cross-subsidising from other parents of younger children, who typically pay a higher hourly fee – in part because the staff ratios to babies are lower – and use registration fees and one-off administration charges, not to mention paying to go on waiting lists for places, to fill gaps.
Eligibility to the new scheme
The child must be aged between 3 and 4 and becomes eligible after their third birthday as per the timings in the following table:
Child’s 3rd birthday
1 January to 31 March – The beginning of term on or after 1 April
1 April to 31 August – The beginning of term on or after 1 September
1 September to 31 December – The beginning of term on or after 1 January
The existing 15 hour three- and four-year-old offer is a universal one. The Department for Education said that 99% of four-year-olds and 94% of three-year-olds have received free nursery places or funding for private childcare provision under the 15 hour scheme scheme.
Many of the details of the new scheme are not yet clear, however. The extra 15 hours are for children from families where both parents are working but we don’t yet know how much or how long parents will have to work in order to qualify for the extra childcare time and earlier reports of a £150,000 earnings threshold have since been denied.
Therefore, we cannot currently tell how many children will be entitled to the scheme.
Has the new scheme been fully costed?
During the general election campaign, the Conservatives pledged £350m for the extra hours. However, early-years providers said it would not be enough and to maintain quality a substantial increase in the rates would be necessary.
The Pre-School Learning Alliance’s research suggests £350m is a quarter of what is needed to make good existing shortfalls and roll the scheme out nationally.
Its chief executive, Neil Leitch, says: “I think we are at breaking point with just the 15 hours. Extend that to 30 and you will see a different position altogether.”
The Government has committed to increasing funding for these places with a review led by Sam Gyimah, Childcare Minister, closing last week and results pending.
And Employment Minister Priti Patel has set up a task force, with providers and stakeholders, to look at how the plans can be progressed speedily.
In brief
The 15 hour scheme is well established, covering 99% of four-year-olds and 94% of three-year-olds, according to the Department for Education. However, there are also well reported funding issues.
Pilots for the 30 hour scheme are due to roll out as early as next September. However, the sector eagerly awaits details of a committed funding increase, plans for implementation and criteria for eligibility.
We will continue to explore this issue over the next week and beyond as details emerge. Please join the debate and let us know your thoughts!