30-hour childcare: 4 in 10 providers fear closure in the next 12 months

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A Pre-school Learning Alliance survey shows childcare providers are increasingly fighting to stay open, one year after the policy was introduced.

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Four in ten childcare providers fear closure near year

A separate survey of parents, carried out by Mumsnet on behalf of the Alliance, also looks at parents' experiences of the 30-hour offer, including paying for extras and accessing the scheme.

Findings from the Pre-school Learning Alliance’s and Mumsnet surveys on the 30 hours show the impact the policy is having on childcare providers and parents, a year since it was introduced nationally.

The Alliance’s survey of nurseries, pre-schools and childminders, conducted between July and August, which received 1,662 responses, found that:

  • For 8 in 10 providers, if the funding rate stays the same next year it will have a ‘somewhat’ or ‘significantly negative’ effect on them.
  • Around half (48 per cent) have increased parent fees as a result of offering the 30 hours.
  • 4 in 10 settings have introduced or increased charges for additional goods and services.
  • A third plan to increase fees for non-funded hours over the next 12 months.
  • 1 in 5 plan to introduce additional charges.

Provider case study

Despite increasing its hourly rates for all parents, St Mary’s Pre-school in Sevenoaks, Kent, is unsure about the future sustainability of the setting.

Supervisor Sue Shuttleworth said, ‘We are offering the 30 hours funding [and] offer one completely free place. We have had to increase our hourly rates for all parents, and fees for two year-olds are now higher than three- and four-year-olds – the first time we have ever had to do this.

‘Parents provide a packed lunch and food for snack time. This is just keeping us sustainable at the moment, but we don't know how long this will last as the minimum wage, pension payments etc increase. The 30 hours is creating a two-tier system where only those who can afford it will be able to access early years education and those from more deprived backgrounds will not.’

Mumsnet survey

A separate poll of parents of three- and four-year-olds carried out by Mumsnet on behalf of the Alliance, which received 1,143 responses, found that just under half (45 per cent) of respondents accessing 30-hour places have been asked to pay additional fees for non-funded hours since taking up the offer.

According to the findings, 4 in 10 said they have been asked to pay new or additional charges for goods. A further 3 in 10 parents have experienced difficulties renewing their 30-hour eligibility online.

Parent comments

One parent, who responded to the survey, said, 'Our first daughter benefited from the 15 hours per week when she turned three in 2013. It enabled me to return to my work as a teacher part-time, but it financially nearly broke the nursery.

‘By the time our second daughter became eligible, they were not able to offer the 30 hours when introduced, and began to operate a complicated system of charging. We were only able to afford to send our second daughter for 15 hours per week; 4.5 hours of those were free and the remaining 10.5 hour were charged at the hourly rate. We were really inconvenienced by this (I am still paying off my credit card a year later). I have heard that only one nursery in our area (and there are many) actually offers the free hours [without charging for extras]’

Another parent, Chloe Matharu, commented, ‘Following an initial positive experience with the 30 hours, we had our allocation removed as the provider would not have been able to continue operating if they had continued to support the families who wanted the 30 hours.

‘They introduced a complex system to replace it and offer a few extra hours, but this wasn’t cost-effective while working only three days a week. For me, this is another sad indictment of how working parents are being consistently undervalued and under-supported by the Government, and how promises are not being kept. With the removal of universal child benefit and the patchy success of access to 30 hours a week, it seems that we are all spending more than ever on childcare.’

Sector reaction

Neil Leitch, chief executive of the Pre-school Learning Alliance, said the findings confirmed that without urgent Government action, the 30 hours would not be viable in the long-term.

He said, ‘We have long warned that without significant increases in funding, settings offering the 30 hours would be at risk of closure.

‘Even those providers who are technically managing to make the 30 hours work are often only able to do so by introducing or increasing additional fees and charges. Is this what the Government meant when they promised parents 30 hours of ‘free childcare’? While better off parents may be able to shoulder these unexpected costs in the short-term, those on the lower end of the income scale – the families that the Government claims to be so committed to supporting – are the ones who are likely to suffer as a result. 

‘Worse still, things are only going to get more difficult, with early years funding levels frozen until 2020 despite the fact that provider business costs like wages, mortgages and rents will inevitably rise over this time.

'The inescapable fact is that, as these figures show, without urgent action, the 30 hours policy is simply not viable in the long term.’

Founder of Mumsnet, chief executive Justine Roberts, said parents have made clear that the scheme isn’t backed by sufficient planning and funding.

‘The idea behind giving working parents 30 free hours of childcare is, in theory, a good one. Even part-time childcare can be higher than the average UK mortgage bill, and Mumsnet users tell us it's often a real barrier when it comes to getting back to work. But any scheme needs to be backed up by sufficient planning and funding and our users are telling us this simply isn't happening.

‘Given the benefits working parents bring to the economy it's not good enough that nearly half of recipients are having to pay additional fees for non-funded hours.’

Jonathan Broadbery, head of policy and external relations at National Day Nurseries Association (NDNA), said, 'These findings will be worrying for both families and nurseries. It just adds to what our members have been telling us over the last few years - parents and providers are paying the price for the Government’s underfunding of ‘free’ hours.

'Today’s figures show that many have no choice but to increase their fees to parents or charge them for additional services. This just shows that these hours aren’t free for parents or nurseries and never have been.

“Every early years setting closure is heart-breaking for children, families and staff and yet we have found that they are becoming more prevalent. This has got to stop. The Government must support childcare providers by ensuring fair funding is in place so they can be paid at rates which cover the cost of delivering the quality care and early years education they provide.'

Minister for children and families Nadhim Zahawi said, 'More than 340,000 children have benefited from a 30 hours place in its first year, as childcare providers have risen to the challenge of delivering the offer – meaning that thousands of hardworking parents are saving up to £5,000 a year on their childcare bills.

'We are spending more than any other Government on childcare support with £1 billion extra funding a year to deliver all of this Government’s free childcare offers. We continue to monitor delivery costs and we have commissioned new research to provide further information on the costs around childcare.'

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