'Half a billion' funding black hole in 30-hours childcare

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As the Childcare Bill reaches its final stages in the House of Commons today, new analysis carried out for the Labour party claims there will be a shortfall of £480m on the Government’s 30-hour plan.

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Labour says that one in three families with three- and four-year-olds are no longer eligible for the 30-hour plans

Moreover, the number of three- and four-year-olds that will be eligible for the 30 hours is also down to 390,000 from the original pre-election promise of 630,000, Labour points out.

Drawing on previous data from the Pre-school Learning Alliance, House of Commons Library researchers calculated that based on Treasury predictions of inflation, there would be a gap in funding for the offer of £157m in 2017/18, when the 30 hours is introduced, rising to £480m by the end of this Parliament in 2019/20. This is equivalent to £470 per child each year, Labour claims.

Bill amendments

The Childcare Bill is expected to become law within weeks. The Bill reaches the report stage in the House of Commons today and will be read for the third time, before it is returned to the House of Lords to decide whether to accept the Bill as it stands. Previous amendments tabled by peers were rejected at the committee stage of the Bill.

While Labour supports the 30-hours policy in principle, shadow education secretary Lucy Powell said the plans were in ‘chaos’.

Labour is also tabling amendments to the Bill this afternoon (25 January), calling for the education secretary to publish an impact assessment within 12 months of the Childcare Bill becoming law, evaluating the effect of the 30 hours on the supply of childcare places, quality of provision, readiness of children to start school, proportion of parents in work, availability and quality of childcare for disabled children, and the cost of childcare to parents who are not eligible for the policy.

A second amendment calls for the Government to carry out an evaluation of the policy’s impact on closing the attainment and development gap of young children.

Lucy Powell said, ‘The Government’s childcare plans are in complete chaos. One in three working parents promised free childcare by David Cameron at the last election will now miss out because ministers are unable to make the funding for their manifesto childcare pledge add up. Their back of a fag-packet calculations mean that many families who thought they would get more help with childcare will receive none and despite reducing eligibility by 200,000 families, the Government still has a half a billion black hole in their plans.

‘With no strategy to raise the quality of childcare, and the sustainability of many childcare providers in doubt due to the shortfall, ministers must do better. The Tories’ pre-election rhetoric on childcare has failed to match reality and parents, children and our economy will pay the price.’

The Conservatives hit back at the comments.

Childcare minister Sam Gyimah said, ‘This Government is doing more than any other to support working families. Doubling the entitlement to free childcare is a key part of this.

‘Suggesting our commitment is underfunded is nonsense. We are the only party who promised to increase the funding rate paid to providers - we are delivering on this through an additional £300 million to the hourly rate.

‘This is based on an extensive consultation with the sector and our review into the cost of delivering childcare, the most comprehensive analysis of this market ever. In contrast, Labour Party’s plans for the economy would wreck our public finances putting this vital investment in our children’s future under threat.

‘Labour needs to decide whether it wants to support hard working families by backing this Bill or play politics with their financial security.’

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