Childcare minister calls 30-hour funding problems 'a myth'

In his keynote speech at the Pre-school Learning Alliance conference, the childcare minister set out to dispel what he described as the ‘myths’ around funding and the sector’s capacity to deliver the 30-hour offer.

Acknowledging that there were differences in opinion between the early years organisation and the Department for Education, he said, ‘At times it appears that the Government and the PSLA disagree,’ he said. ‘A number of times I’ve turned on breakfast TV and Neil Leitch is in the studio commenting on Government policy. What surprises me is that we all share the same objectives and are working towards the same goals.’

He maintained that he had listened to the sector and its demands for increased funding rate for the free entitlement, a single fair funding formula, and a sector workforce strategy.

‘And yet from what I read in the press one could be forgiven for thinking that we have not delivered. But we have and will continue to do so,’ he said.

He added, ‘Your dedication and passion cannot be a substitute for funding for proper funding for your organisations. You all have strong views about funding and I know and I hear all the time but the Prime Minister himself has promised to increase the funding you are paid to deliver the free entitlement. I’ll be honest and say that getting it right isn’t easy.’

The Government’s review, ‘described by the National Audit Office as thorough and wide-ranging’, meant that there would be an extra £350m a year to increase the funding rate for three- and four-year-olds, the two-year-old funding rate and maintain the Early Years Pupil Premium, he said.

Mr Gyimah said that the department would be ‘consulting soon on funding allocations’ and would welcome the sector’s input and feedback.

He also spoke about the ‘myth’ that there was not capacity in the sector to deliver on the 30-hours, saying that the system was already delivering these additional hours, which parents were currently paying for. He also said that he wanted new providers to enter the market and existing providers to expand.

The Government was building the incentive to expand in the market by reducing red tape, for example so that childminders could operate on non-domestic premises and by investing in capital funding.

Mr Gyimah acknowledged that the DfE had had to make some adjustments to the funding rates in some of the early implementer areas, including York, which had been funded well below the national average.

The ‘heart of the funding issue’, he said, was that some local authorities ‘receive in excess of £8 an hour and some £3.50 an hour’, and that the Government knew that to address this it must change some of the funding rates from central Government to local authorities and reform the system that distributes funding. The Government would also be ‘rolling out a new funding formula that is properly thought through.’

In his speech, which followed the minister’s, chief executive of the Alliance Neil Leitch also focused on the 30-hours policy, warning that the Government was 'ad-libbing' and that its use of out-of-dated childcare delivery cost data was putting the viability of the offer at risk.

He said that the Alliance was behind the 30-hours policy.

‘But what we want, is to ensure that the scheme actually works and I fail to see why that should be so controversial.

'And yet, those of us who have raised concerns about how the offer will actually work in practice have been accused of “doom mongering”, “manufacturing outcry” and by one tabloid source, of “being duplicitous in putting profits before the needs of parents”. At best those comments are unhelpful up and at worst, pretty insulting to a sector that has had to bail out ill-conceived policies, time after time.’

He also disputed the Government’s views on capacity in the sector, saying that there was ‘no shred of evidence’ to support the claim that all that would change was that the Government would be paying for the additional hours.

Citing the DfE’s own statistics that on average three- and four-year-olds took up just 18 hours of childcare –not 30, he said, ‘So where exactly are those extra 12 hours (that's 80 per cent of the additional funded hours) coming from?

‘For voluntary settings, this falls to just 15.4 hours a week – so unless my sums are widely adrift, for these providers, doubling the entitlement could very much mean doubling the demand.

‘So the argument that's been put forward in terms of capacity, simply does not wash.’

Also speaking at the event on Friday were Labour MP Jess Phillips, women and equalities committee member, and Gill Jones, deputy director early years at Ofsted.

Ms Phillips said she was ‘extremely concerned about the funding model and the emphasis on childcare rather than early years education.

She added, 'It is pretty clear that there is going to be under-funding of the scheme' and that 'it will be ultimately be susbidised by mainly parents of children aged 0-3 at the same childcare providers of the scheme.'

Any potential rise in the cost of childcare would be a disincentive to work and there was a real potential that the Government could exacerbate the gender pay gap, she said.

She also said that she was concerned that the 30 hours was being used as a work incentive, ‘as a tool to get people back to work rather than as a tool for early education and social mobility.’