Pressure mounts over under-funding of nursery places

Speaking at the Nursery World Business Summit, Sam Gyimah, minister for childcare and education, said the Government was launching a ‘new benchmarking tool’ in response to establish how funding was distributed.

He said, ‘You said that the funding you are getting isn’t enough. We are establishing a benchmarking tool to how funding for two-, three- and four-year-olds is distributed across the country.

‘It should be more detailed at the local authority level. There should be more transparency about where this money goes.’

The tool is likely to be a more detailed version of the existing tool, which has been criticised as inaccurate. This one will show how much each local authority is providing in funding as well as how much councils keep for other educational services such as school support.

Mr Gyimah added that the Government is looking into the issue of reduced business rates for childcare providers.

But, he went on to say, ‘It’s not just about more money – it's about finding new and better ways [of spending], about innovation’.

Referring twice to the Government’s ‘moral mission’ to meet the ‘childcare challenge’, he also said he wanted a mixed childcare sector, but while a benefit of PVIs was that they ‘were willing to be flexible’, saying they should learn from schools about ‘school readiness’ was ‘not a criticism'.

Presenting the results of a major new report into the funding shortfall Neil Leitch, chief executive of the Pre-school Alliance, said that Mr Gyimah had called it ‘overblown’.

He added, ‘We have local authorities saying we can’t do anything, central Government saying it is all the local authorities’ fault, and we are stuck like piggies in the middle.

‘All the parties need to know how much it costs to achieve high quality childcare. We are doing a grave disservice …to the thousands of providers and practitioners which do this important work… and the children they represent.’

‘We will be as active on this issue as we were about ratios because we have the evidence.’

The findings of the ‘Counting the Cost’ report  show that for every 40 places which are paid for with Government funding, eight are unfunded. The pupil premium, which government says can be a retributive source of funding, can actually only make up a maximum of  11% of the shortfall.

Shadow childcare minister Alison McGovern, who has been in her post less than a week following a reshuffle, reiterated Labour’s pledge of 25 hours per week of free childcare instead of 15, which she said would be paid for with an increase on the bank levy of £800m.

David Shaylor, co-owner of Munns Farm Day Nursery, said, ‘Thank you for reiterating what most of us agree with about standards in childcare.

'[This is against a context] of no relief on business rates, no relief on VAT. We have the wider context of high costs which is where the funding rates become critical. We have a strong worry that moving to 25 hours per week of free childcare we [will struggle] to make up the shortfall and end up on a race to the bottom.’