Providers in Wales find £4.50 rate for 30 hours commercially viable

According to the findings from the Evaluation of the Early Implementation of the Childcare Offer for Wales, more than 7 in 10 reported improved profitability and improved sustainability.

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The report also said that, ‘Initial reservations that some childcare providers had about the rate, timings of payments and onerous administration proved to be unfounded.’

Arad Research, in partnership with NatCen Social Research, was commissioned by the Welsh Government to undertake an independent evaluation of the first year of early implementation of the Childcare Offer in Wales, from September 2017 to August 2018.

The report's authors said that the findings are overall positive. There are positive indications in terms of parents reporting increased flexibility in the types of jobs they do, the hours they work, and their disposable income. Researchers said that as the evaluation is of the first year, there is very little evidence available to determine impact currently.

KEY FINDINGS – PROVIDERS

• 40 per cent reported an increase in the number of children on the previous year
• 66 per cent reported that they have capacity to expand should demand increase
• 88 per cent agreed that £4.50 an hour is ‘commercially viable’
• 72 per cent reported improved profitability and 76 percent reported improved sustainability
• 15 per cent introduced extra charges for food and transport
• 25 per cent accessed business support following the introduction of the offer

More than 4,100 children in Wales have accessed the 30 hours in the first year of the scheme's implementation, with the majority of them living in low-income families.

There were 743 childcare providers delivering the 30 hours in Wales in the first year of early implementation of the scheme.

According to the reseach, 80 per cent of the lowest earning parents in each household accessing the offer earn less than the average salary in Wales.

While there was no evidence of a large surge in enquiries for childcare, which some providers had anticipated, 40 per cent of those surveyed reported an increase in the number of children on the previous year.

KEY FINDINGS - PARENTS

•  60 per cent of all parents accessing the Offer (and 80 per cent of the lowest earners in households) accessing the offer earned the equivalent or less than the median population earnings in Wales
• 67 per cent reported having more flexibility in the types of jobs they do and the hours they work, and 60 per cent reported having more opportunities for training
• Access to the offer had encouraged 40 per cent of parents surveyed to access more hours of formal childcare, and 16 per cent of parents say they now use less informal childcare in favour of more formal childcare.

Among parents, 92 per cent reported that the application process was straightforward.

However, submitting evidence of employment was a challenge particularly for self-employed parents, those on zero-hour contracts, or working irregular flexible hours.

The median salary band of individual parents accessing the offer was £20,800- £25,999, with 30 per cent earning less than £15,599.

The childcare offer is currently being rolled out across Wales, and is available in at least some areas in half of Wales’ 22 local authorities. It will be available across the country by 2020.

The research involved 555 responses from an online survey of parents using the 30 hours and interviews with 36 parents, as well as 21 interviews with parents not accessing the offer.

Interviews were also held with stakeholder organisations and 150 childcare providers delivering the offer.

The Welsh Government said it was committed to providing 30 hours a week of government-funded early education and childcare for working parents of three- and four-year-olds, for up to 48 weeks of the year. 

Since September 2017 the 30 hours has been available in seven early implementer local authorities (EILAs), including all, or part of, Anglesey and Gwynedd (joint working), Blaenau Gwent, Caerphilly, Flintshire, Rhondda Cynon Taf, and Swansea.

Minister for children Huw Irranca-Davies said, ‘It’s great to see how well our ground-breaking childcare offer is being received among families right across Wales. 

‘I’m particularly pleased the offer is benefiting low income families, putting more money back into their pockets and allowing them to take up more work or training. 

‘That’s not only good for the Welsh economy, but it’s also reducing strain on family incomes.’

• Download The Evaluation of the Early Implementation of the Childcare Offer for Wales here