Concern over impact of 30 hours in London

It says that funding must reflect the ‘true cost of childcare in London’.

Providers could close their doors or become 'wholly privately funded' if offering state-subsidised childcare becomes no longer viable, it says, reducing the number of places in London and making childcare ever more expensive.

The Economy Committee has written to Education Secretary Nicky Morgan about the ‘detrimental impact’ that doubling the free childcare entitlement could have on many providers in the capital, who are already facing ‘a significant shortfall in funding’, which is ‘most acute in London, due to its higher property and wage costs’.

Take-up of the current 15-hour entitlement is also lower than the national average among parents in the capital. Take-up of eligible twos is only around 40 per cent in some London boroughs.

In the letter, London assembly member Fiona Twycross, chair of the Economy Committee, says that ‘historically the Government has not provided sufficient funding to cover the market cost of childcare in London. As a result, much of the childcare sector has developed a funding model where providers effectively cross-subsidise’ the 15 hours by charging parents at a higher rate for extra hours.

Aside from the funding issues, the letter also calls for Government support for reducing provider costs, by, for example merging ‘back office provision’.

It also says that the Government should do more to identify gaps of provision among childminders in London, and target training and support to help them.

Pointing out that most spare childcare capacity is in schools in London, it suggests that more capital funding to help schools set up nurseries would increase provision without the high start-up costs many providers face.

It also makes the case for more capital funding for childcare providers so that they can adapt to the 30 hours.

It notes that London previously received £8m when the free entitlement was expanded from 12.5 to 15 hours, and argues that the case for additional funding is even stronger now.

London assembly member Fiona Twycross, chair of the Economy Committee, said, ‘The shortage of affordable and flexible childcare is one of the key reasons for low parental employment in London, particularly among women. Many families in London are struggling financially to meet the costs of childcare and this means London’s economy loses out on talent, skills and experience.

‘It’s essential we have sustainable and high quality childcare in the capital and it’s vital that the Government’s childcare commitment is properly implemented. London has long been disadvantaged by funding allocations, so while we welcome the Government’s new entitlement, funding needs to reflect the true cost of childcare in the capital for it to be a success and help more people back into work.’

The National Day Nurseries Association, which gave evidence to the London Assembly Economy Committee, about the challenges of providing affordable childcare in London, said, the Government should use the 30-hour pilots to trial innovative solutions so that the expansion of the free hours could be delivered sustainably.
 
Claire Schofield, director of membership, policy and communications, said, 'Parents’ needs for flexible provision, due to long working hours and commutes, coupled with high building and rent costs, plus the difficulty of recruiting good-quality, experienced staff, all contribute to the issues that nurseries are facing.
 
'The Government’s forthcoming 30 free hours offer is a great chance to help London parents but only if nurseries receive sufficient funding to deliver these hours sustainably, without making a loss.
 
'Nobody wants to see families missing out because nurseries are unable to take part in expanded free childcare.'
 
She added, 'As nurseries look to expand to create more places to meet increased demand, NDNA is also calling for capital funding for building projects to be extended to private, voluntary and independent nurseries as well as schools.'
 
'All areas of the childcare sector have a part to play in offering places for 30 free hours and should be supported equally by the Government and local authorities.'