Settings warn their viability is at risk under 30 hours

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Close to two-fifths of childcare providers think the 30 hours policy could put them out of business.

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Raindrops Day Nursery in Harlow is offering 30 hours for the first term and asking for voluntary contributions

A survey of 1,394 childcare providers by the Pre-school Learning Alliance, carried out in August, found that 38 per cent think their business won’t be sustainable in 12 months’ time as a result of the 30 hours offer.

One respondent said, ‘We are a non-profit charity and have unfortunately used up all the “rainy day” account so will have to close next July unless some improvement of funding happens.’

Another said, ‘So disappointed I will lose my business, which I struggled to set up initially and have managed to sustain myself in recent years. With rising salaries and [introduction of] pensions it really is an impossible mountain to continue climbing.’

Nearly three-quarters of those who took part in the Alliance survey said their current funding rate will not cover the cost of delivering a 30 hours place. The average funding shortfall is 18 per cent.

More than half of respondents plan on introducing/increasing charges for additional goods and services as a result (see table). Some 47 per cent said they didn’t plan on doing so, but it could be that some of these providers already charge for extras.

One provider said charging for additional services is the only way they can ensure sustainability.

Another commented, ‘We are only sustainable due to the fact we are charging extra for snacks and trips and only offering four places per session. But this will still have an impact on finances.

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Just under half of providers plan to increase fees for non-funded hours.

Jane Jones, manager of Mulberry Bush Pre-School in Surrey, said, ‘It has always been our ethos to provide high-quality, affordable and flexible childcare, but the 30 hours offer will mean that we have to compromise on some of these aims.

‘We are only offering the funding for five hours in the afternoon, so parents will have to pay for the morning session at our usual hourly rate.

‘We have also increased our rates for two-year-olds as well as for any additional non-funded hours. We have to do this to remain financially viable.

‘We are not being greedy, we just need to cover our actual costs in order to have a sustainable business model and the current level of funding does not support that.

‘In 21 years’ working at this pre-school, I have never known such a financially difficult period.’

Places

The survey also reveals that some providers will be putting restrictions on places.

More than 35 per cent plan to place restrictions on what days of the week and/or times of the day parents can access the 30-hour entitlement. However, 45 per cent don’t intend to put any restrictions on places, while 18 per cent said they were undecided.

One provider said, ‘We are limiting the flexibility we used to offer parents, who will no longer be able to take short days, such as 9am-2pm.’

Those taking part in the delivery of the 30 hours plan to offer an average of 11 places.

In comparison, the average number of 15-hour places provided by respondents is 24. While the figures can’t be directly compared, they suggest providers typically plan to offer fewer 30-hour than 15-hour places.

One provider said she felt forced into offering the 30 hours by parents ‘ganging up’.

More than 40 per cent of providers said they don’t feel confident that the number of 30-hour places they plan to offer will be enough to meet demand.

Of those that will have a shortfall of places, for most the shortfall is 10 per cent or less. However, one provider said they will have a 75 per cent shortfall. One said, ‘I’ll be very surprised if supply will meet demand.’

Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘As one of the Government’s flagship policies, the launch of the 30 hours offer should have been a day of celebration. Instead, all we have is a policy in chaos.

‘The Government’s total refusal to tackle, or even acknowledge, the fundamental problem of early years underfunding has left providers across the country struggling to find ways of delivering the offer that won’t force them out of business. As a result, parents who expected 30 hours of “free childcare” to take up when and how they wanted are now facing additional fees and charges and either unexpected restrictions on when they can take up their places, or a struggle to find places altogether.

‘This is a direct consequence of the complete mismanagement of this policy and it is unacceptable for Government to continue to turn a blind eye to the situation it has created.

‘We cannot wait for this problem to solve itself. Every week we’re hearing of more and more parents struggling to find places that actually suit their childcare needs. Every week we’re hearing of more and more childcare providers being forced to shut down as a result of the 30 hours. This simply cannot continue.

‘It’s time for the Government to step up, admit it got this wrong and fix the mess that it has made. Otherwise it will be parents and providers who pay the price.’

Labour’s survey

Similarly, a poll by the Labour Party has found that most providers think the 30 hours offer will have a negative effect on their setting.

The survey by Labour’s shadow early years minister Tracy Brabin on the impact of the Government’s policy on providers received 658 responses. It reveals 67 per cent will be offering the 30 hours, despite most thinking the policy will have a negative effect on their setting.

Close to 17 per cent said they wouldn’t be offering the extended entitlement, and 16 per cent were still undecided.

When asked about the impact of the policy on their setting, 74 per cent said they expected it to have a negative effect, while only 7 per cent said it will have a positive effect.

Responding to the findings, the shadow early years minister said she was ‘deeply concerned that many children won’t have access to the quality childcare they deserve and that parents were promised.’

She added, ‘The Tories have completely failed to provide the funding necessary to meet their promise of 30 free hours of childcare for working parents, and providers are rightfully up in arms about the impact.

‘It’s shameful that so many successful and experienced nurseries and childminders, which give children an excellent start in life, now fear the threat of closure as a consequence.

‘The Government have been warned time and again by both the Opposition and voices across the sector that their lack of investment will be highly damaging, but they have refused to listen.’

Are you making any changes to charges for additional goods and services as a result of the 30-hour offer?

DFE’S RESPONSE

The Department for Education referred to a second independent evaluation of its early roll-out programme, published last week, which shows that eight out of ten providers were ‘willing and able’ to double their current 15 hours offer.

Also, the report found that there was no evidence of funding being a substantial barrier to 30 hours delivery.

Education secretary Justine Greening said, ‘High-quality childcare not only helps our children get the best start in life, it supports many parents who want or need to work.

‘For too long lots of families really struggled to manage the cost of childcare and that’s why we have delivered on our promise to provide 30 hours free – saving working families around £5,000 a year.

‘Alongside the support we are giving through Tax-Free Childcare and Universal Credit, it will make a real difference to families’ lives.’

CASE STUDY

Raindrops Day Nursery in Harlow, Essex

The three times Outstanding nursery, which has been operating for more than 11 years, will be delivering the 30 hours from September, but says finances will be tight.

Manager Christine Chaffe (pictured far right) told Nursery World that by offering the 30 hours the setting is ‘flying close to the wind [financially].

‘We’ve managed fairly well up until recently, but with the Living Wage coming in, auto-enrolment pensions and keeping up to date with training now that the [local authority] subsidy and availability has been reduced, our costs have increased.

‘I have an outstanding team, many of whom have been at the nursery for years. I have invested in my senior team, but with all the additional costs that are being put onto us it is extremely difficult to be able to keep these staff members while we are scraping the barrel.’

The setting has given all 17 parents who have successfully applied for the 30 hours a place. However, after the first term it will review whether it can continue to deliver the policy.

While Raindrops Day Nursery will not be putting restrictions on places, it has asked parents for a voluntary contribution to meet the costs of additional resources such as snacks and extra-curricular activities. The funding the nursery receives from Essex County Council, £4.21 per hour per child, falls short of the cost of providing a place by £1.54 per hour per child. Ms Chaffe says the setting held a presentation evening to explain to parents the shortfall the nursery will be experiencing.

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