The fact that the Government has always referred to the funded hours as ‘free’ hours has long been a bugbear for the sector. Ever since the funded schemes were introduced in 2017, providers have laboured the point that the funding does not cover the true cost of delivery.
Now we have a small but significant win. The Department for Education has confirmed it will refer to the early entitlement offers as ‘government-funded’, rather than ‘free’, in Government communications. It doesn’t alter the fact that there are still ongoing funding shortfalls, but it does suggest an idealogical shift that could pave the way for a more frank exchange around the viability of the extended childcare programme.
Meanwhile, the Autumn Budget on 30 October will be one of the most closely watched. The Chancellor, Rachel Reeves, will conduct a one-year spending review setting detailed departmental allocations for 2025 – 26. Alongside this, she will update plans for the overall level of departmental spending – the ‘spending envelope’ for 2026-2027 onwards. The Government’s inherited commitment to childcare sits with that for the NHS, defence and overseas aid, exacerbating the challenges of its national fiscal position.
As Leah Turner at Owen Froebel points out in her column on page 52, financially navigating the rise to the National Minimum Wage next April will be tricky, and largely met by increasing fees. However, with the higher funding rates currently being given for younger children, the burden of the increase will fall on provision for older children and for privately paid-for hours.
Due to the public financial position, the outlook for future funding increases inevitably looks bleak. And meanwhile, as our analysis (page 6) highlights, community nurseries are having to close their doors.
