Research carried out by PACEY, shared exclusively with Nursery World, suggests that the newly introduced floor rate is close to the fees that childminders currently charge.
While nurseries will feel the impact of rising business costs, including increases to the National Living Wage and business rates, childminders have much lower overheads.
The Government’s decision to introduce a new minimum rate of £4.30 for councils means that, in effect, at least £4 an hour will be passed on to providers to offer the 30-hour entitlement of free childcare for working parents of three- and four-year-olds from September 2017.
An extra £30m has been found in the DfE’s budget to support the introduction of this new rate.
Both the National Day Nurseries Association and the Pre-school Learning Alliance have welcomed more funding, but say it does not go far enough.
Childminders are clearly not the whole solution to the provision of 30 hours – with currently just 1 per cent of three- and four-year-olds taking up the funded 15 hours with a childminder – but PACEY chief executive Liz Bayram said they should see the 30-hour offer as an opportunity.
‘The commitment for childminders to be paid monthly and to be able to charge parents for discretionary consumables or additional services will make a big difference to whether childminders feel able to offer funded hours,’ she said. ‘And the fact that the Government allows parents to split their funding across two providers means many childminders could benefit from partnering with other providers.’
PACEY’s survey of childminders carried out earlier this year with 1,700 respondents found that more than two-thirds of them charged £4.50 or under an hour; for example, 27 per cent charged £3.50-£4, and 24 per cent charged £4-£4.50.
Ms Bayram added, ‘From PACEY’s own research on current childminders’ fees, we know that the £4.09 per hour floor rate [from 2018] is actually likely to be the same as, or very close to, the fee many childminders currently charge. Add to this one or two of the supplements, for example the quality supplement at, say, a further 40p per hour, and the additional cost of consumables, and 30 hours starts to become a more attractive offering – and more in line with market rates.’
Sally McGeown, an Outstanding childminder from Watford in Hertfordshire, said she will receive a drop in funding but remains positive about the 30-hour offer. Her current rate is £5.50 per hour, but this will fall to £5.38. She charges £5 an hour. Ms McGeown has been running Playful Minds with her husband Mick for 11 years, and has been a registered childminder for more than 20.
She told Nursery World, ‘It has been a worry not knowing the rate and whether we would be able to afford it. A lot of childminders charging more will be unhappy, but an awful lot of childminders are charging around £5 an hour. I see it as a positive thing.’
She said because many school nurseries will not have the capacity to offer the full 30 hours, parents will be looking for childminders. The setting is registered to take six under-fives, all of whom attend until they start Reception, and three of the current children attend for 50 hours a week.
Ms McGeown was clear that she would not want to split the 30 hours with another provider, because ‘we can offer the 30 hours for all children’. Anecdotally she added that childminders in nearby St Albans, a more affluent area, were able to charge £8-£10 and were not offering the current 15 funded hours.
She said, ‘We don’t have the overheads of a nursery. But we do have an income need because we’re both childminders. We have to fill all our spaces to pay our mortgage. I personally think that for childminders, the hourly rate is going to be reasonable. Hopefully it will be sustainable.’
Meanwhile, other sector organisations remain concerned about the new funding formula.
‘We are still in a situation where the early years funding rates that local councils will receive next year will remain stagnant until 2020, while business costs will continue to rise,’ said Neil Leitch, chief executive of the Pre-school Learning Alliance. ‘This is not sustainable and must be addressed if the Government is to ensure the sector can survive.
‘While increased funding is undoubtedly welcome, it is important not to confuse “more money” with “enough money”.’
NDNA chief executive Purnima Tanuku said, ‘While it’s welcome that the Government has listened to concerns, looked at the principle of a minimum level of funding and allocated more money to address the lowest-funded local authorities, the small funding uplift doesn’t go far enough.
‘Nurseries are ideally placed to deliver 30 hours, but conditions have to be right. NDNA is clear that if enough funding can’t be found to plug the gap, then nurseries must be allowed to treat Government funding as a contribution to the cost of a place with parents able to make up the difference at their chosen childcare provider.’
Even more concerning for providers, a debate in the House of Lords last week revealed that the rate for early years funding will not be reviewed annually.
Asked by the Earl of Listowel whether the Government plans to conduct an annual review of early years childcare funding to ensure sustainability and quality, Lord Nash, the DfE peer, said although the Government plans to monitor the implementation of the 30 hours, it does not intend to conduct a formal annual review.
- See Liz Bayram’s article, ‘30 hours – the beginning of a childminder revival?’