The consultation proposes increasing the application fee and the annual fee paid to Ofsted by childcare providers on the Early Years Register, effective from next April.
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The 12-week consultation suggests increasing fees by £8 for childminders and sessional settings and by £49 for settings that offer full daycare.
Currently childminders and sessional settings pay a £35 application fee and full daycare settings a £220 fee, both of which must be renewed annually.
Under the proposals, fees could increase to £43 for childminders and sessional settings and £269 for full daycare settings from next year.
Existing providers will not be required to pay the increased annual fee until the next anniversary of the date on which they became registered on the Early Years Register.
Ofsted says the rise is being applied equally to all registered childcare providers as a percentage increase equalling the sum of inflation since 2010.
The reasoning behind this it is to help the inspectorate recover more of the costs associated with childcare inspection and regulation.
The consultation also seeks views on the provider categories used to determine Early Years Register application fee and annual fees.
However, any proposals to amend the categories will be subject to further public consultation and will not come into force until April 2021.
Children and families minister Nadhim Zahawi said, ‘We want every child to have the best start in life and know our dedicated early years workforce play an important role in their early education. That’s why we are improving their skills and development, so quality continues to rise, and investing more in childcare than ever before, including £3.5 billion this year alone in our free offers.
‘Ofsted’s registration fees for early years providers have not increased since 2010. We recognise the sector may need time to adjust to any proposed increase next year, which is why we are engaging with them now, as well as seeking views on what a new fee model should look like from April 2021.’
The National Day Nurseries Association (NDNA) and Early Years Alliance argued that funding should also be kept in line with inflation.
Purnima Tanuku, chief executive of NDNA, said, ‘Although we can understand the reason why the DfE needs to increase Ofsted’s fee after ten years, we could well apply the same logic to childcare funding.
‘The minister must also put up funding rates to keep track of inflation and delivery costs.
‘Any increase in fees is just one too many for childcare providers who are already staggering under the heavy burdens of staffing salary and pension cost increases, stagnating funding rates over the past few years for funded places and business rates. If nurseries are to continue to remain sustainable, they need positive news about funding rates.
‘We will be urging all our members to respond to this consultation.’
Neil Leitch, chief executive of the Early Years Alliance, said, ‘It’s not surprising to hear that Ofsted wants to increase registration fees - there’s no doubt that running costs will have increased in line with inflation in recent years. And it’s good to hear proposals that will tier prices depending on provider type.
‘But it is staggering that after years of the Government denying any negative impact of rising costs on providers, including dismissing those struggling as “outliers”, they’re now asking the sector to swallow yet another increase to their outgoings.
‘If the Government can admit that Ofsted needs a fee increase to keep pace with inflation then it’s beyond time they looked again at early years funding. That means not only an urgent increase in funding levels but also a commitment to review them annually – anything less would reek of double standards and consign many more providers to closure.’
The Professional Association for Childcare and Early Years (PACEY) said it was 'interested in exploring the re-categorisation of provider type.
Chief executive Liz Bayram said, 'There is logic to this proposal but it cannot end up being a mechanism to substantially increase fees for some providers in the future.
She added, 'Any increase in fees must be accompanied by ongoing improvement in the service Ofsted provides. In particular, in past months many new providers have experienced months of delay with their registration application processed by Ofsted and this needs to get better.
'The bigger issue remains of how the DfE will ensure sustainable funding for providers who are delivering its early education entitlement. Funding that needs to recognise that costs are increasing for providers as they are for Government.'
- The Ofsted consultation is here
- The consultation runs until 9 October 2019.