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Childcare changes threatened by underfunding, charity says Childcare changes threatened by underfunding, providers say
(about 1 hour later)
Childcare providers in England say the system is at "breaking point" due to underfunding and a plan to double free provision could lead to "meltdown". Childcare providers in England say the system is at "breaking point" as plans to double free provision for three and four-year-olds in England are sped up.
That warning - from industry body the Pre-School Learning Alliance - comes as ministers say trials of the new scheme are being brought forward to 2016. The warning from one industry body, the Pre-School Learning Alliance, comes as ministers say trials of the new scheme are being brought forward to 2016.
The current allowance of 570 hours a year for three and four-year-olds will be doubled for working parents.The current allowance of 570 hours a year for three and four-year-olds will be doubled for working parents.
The government says it is committed to increasing funding. David Cameron said it would "take time" to get the policy right.
The Pre-School Learning Alliance - which represents 14,000 private, voluntary and independent groups - is warning of "meltdown" in the system because of a shortfall in government funding.
It says the grant for the existing 15 hours falls, on average, around 20% short of the true cost of providing care - £3.88 per hour compared with £4.53.
Employment Minister Priti Patel told the BBC the government accepted "funding rates need to increase" and is launching a consultation on how the policy will work in practice.
'Crunch time'
Currently, all three and four-year-olds in England are entitled to 570 hours of free early education or childcare a year, which works out as 15 hours each week for 38 weeks of the year.Currently, all three and four-year-olds in England are entitled to 570 hours of free early education or childcare a year, which works out as 15 hours each week for 38 weeks of the year.
The Childcare Bill, announced in last week's Queen's Speech, would double this for working parents with a household income of less than £150,000 - although it is not clear yet how many hours they will have to work in order to qualify.The Childcare Bill, announced in last week's Queen's Speech, would double this for working parents with a household income of less than £150,000 - although it is not clear yet how many hours they will have to work in order to qualify.
The change had been due to come into force from September 2017, but some working parents will be entitled to the extra help when pilots begin in September next year.The change had been due to come into force from September 2017, but some working parents will be entitled to the extra help when pilots begin in September next year.
'Breaking point' However, the alliance said many groups were already having to charge parents extra for hours of childcare not included in the scheme to make ends meet, and would struggle to deal with the changes.
However, the Pre-School Learning Alliance - which represents 14,000 private, voluntary and independent groups - says the government grant to childcare providers for the existing 15 hours falls, on average, 20% short of the true cost. "I think this is crunch time," said chief executive Neil Leitch.
A study by specialist research group Ceeda for the alliance suggests providers could lose up to £661 a year for every three and four-year-old in the scheme, if the plan goes ahead at current rates.
The alliance said many groups were already having to charge parents extra for hours of childcare not included in the scheme to make ends meet.
"I think this is crunch time, I think there will be a meltdown," said chief executive Neil Leitch.
"While we of course welcome the drive to improve the availability of childcare in this country, these figures clearly show 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 the government's plan to extend funded childcare hours simply cannot work without a substantial increase in sector funding.
"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.""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."
He continued: "I think we are at breaking point with just the 15 hours. Extend that to 30 and you will see a different position altogether. 'Funding critical'
"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 National Day Nurseries Association welcomed the doubling of provision, but also said its members were "struggling with current levels of investment" and the consultation "must result in a substantial increase in funding".
Linda Symonds, owner of Kidz Kabin nursery in north London, said the shortfall to her business was about 50%. "Given the speed of this reform, it is now extremely important that the government starts work with the childcare sector as soon as possible to find practical, workable solutions, addressing all the issues involved," chief executive Purnima Tanuku said.
"At the moment we don't even break even on what they pay us. Unless we make some profit we can't invest and pay staff properly," she said. "Funding is critical and it's vital that the increase pledged by the government is meaningful."
'Fair funding' Labour's shadow education secretary Tristram Hunt said the Conservative Party "failed to explain how it would fund its childcare offer before the general election", and added: "It remains unclear how they propose to fill the funding gaps in their plans now."
David Cameron told ITV's This Morning it would "take time" to get the policy right "because obviously we need an expansion of the childcare sector, we need more nurseries, more of these places to open, so we're working with them to expand". The prime minister told ITV's This Morning it would "take time" to get the policy right "because obviously we need an expansion of the childcare sector, we need more nurseries, more of these places to open, so we're working with them to expand".
The prime minister said the government would start talking to childcare providers "immediately about what's the best way of making sure that they're being properly paid for the childcare that they provide so we can expand the number of places". He said the government would start talking to childcare providers immediately "about what's the best way of making sure that they're being properly paid for the childcare that they provide so we can expand the number of places".
The bill is being introduced to Parliament on Tuesday and a consultation launched on how the policy should work in practice. The cost to the Treasury was initially estimated at £350 million a year, but Ms Patel said the sums involved were yet to be finalised.
The cost to the Treasury was initially estimated at £350 million a year, but Employment Minister Priti Patel told the BBC the sums involved were yet to be finalised.
Ms Patel said: "We know that funding rates need to increase."
Asked why households with a relatively high income would receive help, she added: "This isn't about subsidising well-off people at all. This is about providing affordable childcare and increasing childcare provision for working families."Asked why households with a relatively high income would receive help, she added: "This isn't about subsidising well-off people at all. This is about providing affordable childcare and increasing childcare provision for working families."
Ministers say up to 600,000 families could benefit, saving as much as £5,000 a year.Ministers say up to 600,000 families could benefit, saving as much as £5,000 a year.
In Scotland, three and four-year-olds are entitled to up to 600 hours of free early years education or childcare a year, while in Wales, provision is for a minimum of 10 hours a week.In Scotland, three and four-year-olds are entitled to up to 600 hours of free early years education or childcare a year, while in Wales, provision is for a minimum of 10 hours a week.
In Northern Ireland, it is limited to four-year-olds only, for up to 12.5 hours a week.In Northern Ireland, it is limited to four-year-olds only, for up to 12.5 hours a week.
What is your reaction to the doubling of free childcare? You can email haveyoursay@bbc.co.uk.What is your reaction to the doubling of free childcare? You can email haveyoursay@bbc.co.uk.
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