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| Free childcare: Nurseries warn Cameron's pledge may cost parents more | |
| (about 9 hours later) | |
| David Cameron will on Monday pledge to bring forward his plans to double free childcare a year early – although a leading group of nurseries and other providers has warned that the scheme could end up costing many parents more. | David Cameron will on Monday pledge to bring forward his plans to double free childcare a year early – although a leading group of nurseries and other providers has warned that the scheme could end up costing many parents more. |
| The prime minister will accelerate the proposals to increase free care from 15 to 30 hours a week for three- and four-year-olds, with pilots beginning from September 2016. Ahead of legislation being introduced in parliament on Tuesday, he will argue the plans are “giving more people the opportunity to get into work”. | The prime minister will accelerate the proposals to increase free care from 15 to 30 hours a week for three- and four-year-olds, with pilots beginning from September 2016. Ahead of legislation being introduced in parliament on Tuesday, he will argue the plans are “giving more people the opportunity to get into work”. |
| But research by the Pre-school Learning Alliance of private and voluntary childcare providers found the policy could create a £350m funding gap because hours paid for by the government are currently underfunded. They claim the gap could end up being covered by other parents whose rates would go up to subsidise the new scheme. | But research by the Pre-school Learning Alliance of private and voluntary childcare providers found the policy could create a £350m funding gap because hours paid for by the government are currently underfunded. They claim the gap could end up being covered by other parents whose rates would go up to subsidise the new scheme. |
| Related: David Cameron's generous childcare pledge doesn't add up, experts warn | Related: David Cameron's generous childcare pledge doesn't add up, experts warn |
| Cameron sought to overshadow Labour’s offer on childcare at the election by promising more free hours, but the government is still facing criticism for the high overall costs of childcare. The government is also under pressure over the possible impact on family budgets of changes to welfare, following reports that Iain Duncan Smith, the work and pensions secretary, is looking at plans to cut child benefit. | Cameron sought to overshadow Labour’s offer on childcare at the election by promising more free hours, but the government is still facing criticism for the high overall costs of childcare. The government is also under pressure over the possible impact on family budgets of changes to welfare, following reports that Iain Duncan Smith, the work and pensions secretary, is looking at plans to cut child benefit. |
| Labour’s shadow work and pensions secretary Rachel Reeves said millions of working families would lose money if the reports were true and urged Cameron to “come clean with the public about their plans to cut child benefit and child tax credits”. | Labour’s shadow work and pensions secretary Rachel Reeves said millions of working families would lose money if the reports were true and urged Cameron to “come clean with the public about their plans to cut child benefit and child tax credits”. |
| Harriet Harman, Labour’s acting leader, has also promised to hold Cameron to account over what he has promised on childcare, noting the cost for the average family has soared by £1,500 a year since 2010. “The rhetoric might be promising, but the reality is that children’s centres have closed and the cost of childcare has soared,” she said last week. | Harriet Harman, Labour’s acting leader, has also promised to hold Cameron to account over what he has promised on childcare, noting the cost for the average family has soared by £1,500 a year since 2010. “The rhetoric might be promising, but the reality is that children’s centres have closed and the cost of childcare has soared,” she said last week. |
| No 10 said the government is committed to increasing the average childcare funding rates paid to providers, with the Department for Education to shortly begin a review into rates overseen by childcare minister Sam Gyimah. | No 10 said the government is committed to increasing the average childcare funding rates paid to providers, with the Department for Education to shortly begin a review into rates overseen by childcare minister Sam Gyimah. |
| The research conducted for the Pre-school Learning Alliance found that the government currently underfunds childcare providers, meaning that many have to subsidise their full cost by charging the children of other families higher hourly rates. | The research conducted for the Pre-school Learning Alliance found that the government currently underfunds childcare providers, meaning that many have to subsidise their full cost by charging the children of other families higher hourly rates. |
| “The so-called free childcare scheme is nothing of the sort. For years now, the initiative has been subsidised by providers and parents because of a lack of adequate government funding,” said Neil Leitch, chief executive of the alliance, whose 14,000 members include private and voluntary daycares and nurseries. | “The so-called free childcare scheme is nothing of the sort. For years now, the initiative has been subsidised by providers and parents because of a lack of adequate government funding,” said Neil Leitch, chief executive of the alliance, whose 14,000 members include private and voluntary daycares and nurseries. |
| “While we of course welcome the drive to improve the availability of childcare in this country, these figures clearly show that the government’s plan to extend funded childcare hours simply cannot work without a substantial increase in sector funding.” | “While we of course welcome the drive to improve the availability of childcare in this country, these figures clearly show that the government’s plan to extend funded childcare hours simply cannot work without a substantial increase in sector funding.” |
| A spokesman for the Department for Education said the extension to 30 hours a week – worth around £5,000 a year – would help families with childcare costs, as well as allowing providers to expand and encouraging new ones to open. | A spokesman for the Department for Education said the extension to 30 hours a week – worth around £5,000 a year – would help families with childcare costs, as well as allowing providers to expand and encouraging new ones to open. |
| “We also recognise the importance of funding rates, which is why we have already committed to increase average childcare funding rates, with the review set to begin before summer,” the DfE spokesman said. | “We also recognise the importance of funding rates, which is why we have already committed to increase average childcare funding rates, with the review set to begin before summer,” the DfE spokesman said. |
| The study found that private nurseries would lose £660 a year for each child taking up the extended entitlement, if government funding remained at current levels. | The study found that private nurseries would lose £660 a year for each child taking up the extended entitlement, if government funding remained at current levels. |
| Related: Childcare costs: the UK and Ireland are worst on price | Related: Childcare costs: the UK and Ireland are worst on price |
| The total cost to private providers after the extension to 30 hours is estimated to be £1.95bn each year – but government funding only covers £1.7bn, leaving a shortfall of £250m. Private daycares also face a shortfall of more than £100m on the government’s existing offer of free childcare to some two-year-olds. | The total cost to private providers after the extension to 30 hours is estimated to be £1.95bn each year – but government funding only covers £1.7bn, leaving a shortfall of £250m. Private daycares also face a shortfall of more than £100m on the government’s existing offer of free childcare to some two-year-olds. |
| The research also suggests the Conservatives underestimated the potential costs of the new policy. Instead of the £350m extra spending that the party claimed during the election campaign, the researchers estimate that at current rates the policy would cost £1.5bn if each eligible child took their extra 15 hours. | The research also suggests the Conservatives underestimated the potential costs of the new policy. Instead of the £350m extra spending that the party claimed during the election campaign, the researchers estimate that at current rates the policy would cost £1.5bn if each eligible child took their extra 15 hours. |
| “While we recognise that the Conservatives have promised to review local funding rates, the fact that they chose to estimate the cost of extending funded childcare before finding out how much funding rates will need to increase raises serious questions as to how meaningful such a review would be,” Leitch said. | “While we recognise that the Conservatives have promised to review local funding rates, the fact that they chose to estimate the cost of extending funded childcare before finding out how much funding rates will need to increase raises serious questions as to how meaningful such a review would be,” Leitch said. |
| “Simply raising rates by a few pence per hour will do little to address the current situation.” | “Simply raising rates by a few pence per hour will do little to address the current situation.” |
| The research was backed by a separate report from the Professional Association for Childcare and Early Years (Pacey), which found many providers “are being forced to cross-subsidise their free places through higher fees or retracting the number of funded places, both undermining government’s aims to increase the affordability, accessibility and quality of early years education”. | The research was backed by a separate report from the Professional Association for Childcare and Early Years (Pacey), which found many providers “are being forced to cross-subsidise their free places through higher fees or retracting the number of funded places, both undermining government’s aims to increase the affordability, accessibility and quality of early years education”. |
| Liz Bayram, Pacey’s chief executive, said: “These findings should provide serious cause for concern for the government. | Liz Bayram, Pacey’s chief executive, said: “These findings should provide serious cause for concern for the government. |
| “Now that a commitment has been made to extend the number of free early education places, the challenge remains how to ensure the childcare sector is supported to deliver these places.” | “Now that a commitment has been made to extend the number of free early education places, the challenge remains how to ensure the childcare sector is supported to deliver these places.” |