I, along with many others involved in the Early Years sector, have been very vocal about the negative impact of the 30-hours of funded childcare offer.
Now, nearly a year on, it's clear the policy is causing huge challenges for nurseries, as the findings of the National Day Nurseries Association (NDNA) annual nursery survey for England 2018 prove without a shadow of doubt.
The survey took place in March and April 2018 with 709 nurseries responding.
Shortfalls in Government funding have more than doubled over the past year, leaving cash-strapped nurseries struggling to pay even minimum wages to staff, the survey found.
The deficit between the cost of delivery and funding paid via local authorities has grown to an average of £2,166 per year per child.
This cost is passed on to parents through higher fees for younger children or charges to parents for extras.
Almost half of the respondents to the NDNA survey charge parents up to £10 per day to make up the shortfall to provide these ‘free’ childcare places.
The 30 funded hours policy, rolled out across England in September 2017, has also created a huge administrative burden, with nurseries losing at least one staffing day each week to deal with the new system and help parents register.
A third of nurseries that responded to the survey are having to limit the funded places they can offer to try to reduce their spiralling shortfalls. While local authorities paying a third of nurseries late is further exacerbating their cash flow challenges.
The NDNA survey also found:
- The top three challenges for nurseries this year are increasing staff wages, dealing with increased administration and achieving profit/surplus
- 71% of nurseries plan to increase their fees – by an average of 4.6%, higher than last year’s 4.5%
- 19% of nurseries expect to make a loss, with only 43% expecting a profit or surplus
- 31% of nurseries experience late payments from local authorities – the average wait is three and a half weeks
- 54% say funding for two-year-olds places doesn’t cover their costs – the average hourly rate is £4.99 and average shortfall £1.82. Although funding has gone up slightly increased costs inflated the shortfall
- 87% say funding for three and four-year-olds doesn’t cover their delivery costs – the average hourly rate of £4.25 is higher than last year’s £3.94, but average shortfall increased to £1.90 per hour, £2,166 per year, due to spiralling costs
- 17% are limiting 30 hour places for three and four-year-olds, a further 31% plan to limit places, 63% will continue as they are, 6% either opted out or are likely to opt out
- The average nursery spends 7 hours per week on 30 hours administration, 25% spend 10 hours or more
NDNA Chief Executive Purnima Tanuku OBE says: “This is a terrible state of affairs in a sector which should be thriving as more children than ever before take up their funded places.
“We expect government to respond by saying it has invested record amounts into Early Years – but the funding is insufficient to pay for high quality Early Years education that supports all children to achieve their best.
“The Government must act now. Echoing the Treasury Select Committee’s recommendations to Government earlier this year, Government, via local authorities, must pay providers the going rate which keeps pace with rising wages and other business costs.
"Let nurseries focus on what they do best, providing high quality learning experiences for children.”