Further concern for sector as DfE survey shows increasing childcare delivery costs
Katy Morton
Thursday, November 7, 2019
The annual cost of providing childcare has risen by 20 per cent since last year, new Department for Education figures reveal.
The latest Childcare and Early Years Providers Survey shows the annual cost of delivering childcare for private and voluntary providers in 2019 is £240,333. This is up from £199,708 in 2018.
Staff wages account for the higher proportion of childcare delivery costs for nurseries and pre-schools (73 per cent), followed by rents and mortgages (10 per cent) and food costs (4 per cent).
The figures are based upon data submitted by childcare providers between March and July.
The publication of the survey follows the news that some local authorities will receive up to 8p more per hour, per child for delivery of the funded hours – the equivalent of just a 2 per cent rise. However, the amount passed on to childcare settings is likely to be much less.
The statistics show that one in two (53 per cent) group-based providers increased their fees for at least one age group over the last year.
They also reveal slightly fewer providers are operating now than in 2018, 72,400 this year compared to 73,200 last year.
However, the number of group-based providers has risen slightly since last year.
Childcare places
The number of registered childcare places also increased over the 12-month period. The survey estimates there were 1,630,200 places across all provider types in 2018 (when excluding Reception provision and before and after-school places), compared to 1,655,800 in 2019.
The survey also reveals almost three-quarters (73 per cent) of group-based providers have spare capacity. A total of 70 per cent reported spare places in their morning sessions, while 77 per cent has spare places in their afternoon sessions. A higher proportion of private providers had spare capacity.
Just under half (48 per cent) of childminders reported having spare capacity.
Workforce
According to the findings for 2019, as of Spring, there was an estimated 363,400 staff working in the early years and childcare sector, this compares to 352,100 the same time last year.
Sector response
Neil Leitch, chief executive of the Early Years Alliance, said, ‘These figures show just how woefully inadequate the recently-announced increase in early years funding truly is. With ongoing increases in the national living and minimum wages, the cost of running a childcare business has increased hugely over recent years, and yet Government investment into the sector has completely failed to keep up.
‘With plans to both increase statutory wage requirements and expand so-called “free childcare” offers being mooted by various political parties, it’s clear that, whoever is successful at next month’s general election, a significant increase in childcare funding will be needed if the early years is to remain viable and sustainable.’
The Professional Association for Childcare and Early Years (PACEY) also urged winner of the general election to ensure long-term sustainable funding for childcare providers.
Chief executive Liz Bayram said, ‘If low funding rates, delayed payments and other red tape continue, we risk more providers closing and more struggling to find the funds they need to provide the staff training and support that underpins high quality care for our youngest children.’
Stella Ziolkowski, director of quality and training at the National Day Nurseries Association (NDNA), commented, ‘It’s very difficult to see the sector trends from the last few years because of the way that the data has been presented this year. We will be asking the DfE why the reporting has changed in this way.
‘The report also reveals increasing numbers of nurseries raising their fees, an obvious response to the funding shortfall and rising business costs.’
- The DfE survey findings are available here
