Counting the cost of early years funding shortfalls

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As recent reports reveal ongoing problems with the underfunding of the 30 hours, Neil Leitch, chief executive of the biggest voluntary sector provider the Pre-school Learning Alliance, calls for Government action, as he explains why it has closed more than 20 settings

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Neil Leitch: 'It has been one of the most difficult periods we have experienced'

Have you heard the news? Everything is fine with the 30 hours. Better than fine, in fact – the whole scheme is going swimmingly. Parents are having no problems with it and other than a pesky few outliers, early years providers are rolling it out without any issues - in fact, eight in 10 are 'happy' to do so.

At least, that's what the Government would like us to believe. Last week, they put out a quite extraordinary press release celebrating the success of the first year of the policy, one that painted a wholly positive picture of the ‘significant positive benefits’ of the scheme, and suggested that all involved were reaping the benefits.

The problem is that isn't quite true. In fact, it's not true at all. Yes, the scheme is popular with parents – understandably given that childcare costs have long been a significant strain on many families' finances. But a recent Mumsnet survey, conducted on behalf of the Alliance, found that nearly half of parents were paying extra fees as a result of taking up the 30 hours. In fact, the government's own commission evaluation of the scheme reported that 'substantial proportions' of parents had reported restrictions on when they could use the 30 hours or that they had to pay charges for additional items or activities (48 per cent and 56 per cent respectively).

And what about providers? Are eight in 10 really 'happy' to deliver the offer? Not quite. This statistic seems to be based on the evaluation of the early rollout of the policy in just four local authorities which took place back in 2017 and found that 83 per cent of providers already offering the free entitlement were 'willing and able' (not necessarily 'happy') to deliver the offer. Once providers who weren't already offering the funded entitlement were included, this fell to just 63 per cent. Our recent survey of more than 1,600 providers found that less than three in 10 felt positively about the offer.

But of course, while much of the current focus is on the 30 hours, it's not actually the scheme that's the problem. The problem is underfunding. Of course, it's a problem hugely exacerbated by the 30 hours policy, given that it removes much of providers' ability to cross-subsidise – but there are plenty of providers only offering the 15 hours, who too have seen business costs rise substantially while funding rates stagnate, and are also struggling to stay afloat.

Which is why, the day after our recent survey results were published, it was so galling to see education secretary Damian Hinds insist, in an interview with the Guardian, that there is no problem with early years funding, and that current levels will remain fixed. This is madness. Stagnant funding levels are forcing settings to close their doors for good. And we at the Alliance know this firsthand – because it has happened to us.

Over the past year, we have had to make the incredibly difficult decision to close down nearly two dozen of our settings across the country. Some of these offered the 30 hours, some just the 15 – but all suffered from the ongoing, unsustainable lack of adequate funding, to the point that when faced with yet another year of rising rents, wages and other costs, but little to no change – and in some areas, a fall – in funding, we could simply no longer find a way to square the circle. The fact that we operate predominantly in areas of deprivation made this all the more impossible, as this means that many of our nurseries and pre-schools are heavily reliant on 'free entitlement' funding – and it was those settings that were most reliant on government funding that we were unable to keep open. Doesn't that just say it all?

Having been with the organisation for more than a decade, I can tell you that it has been one of the most difficult periods that we have ever experienced. I don't say this for any personal sympathy whatsoever. We at the Alliance are very lucky to still manage a very large number of settings and to be able to continue our passion for delivering quality care and education to children and families. I know from the emails and phone calls I receive every day that this is not the case for so many providers out there – that, for them, making the decision to close often means the end of their involvement in the sector all together.

But every time a setting closes – whether a childminder, a single site provider or a larger operator – it means practitioners losing their jobs, parents losing the childcare they rely on and children being forced to leave somewhere that they've come to know and love. And so I cannot stand by and watch the Government dismiss the experiences of providers who have lost their livelihoods, all because they are not willing to admit there is a problem with this policy.

Over recent weeks and months, government ministers and other politicians have stressed the need to protect maintained nursery schools because of the valuable service they provide to families in disadvantaged areas. Back in July, children and families minister Nadhim Zahawi told the Education Select Committee that the Department for Education would put its ‘best evidence forward to fight for maintained nurseries’ ahead of next year’s government spending review. Only this weekend, it was reported that 70 MPs have signed a letter calling on the Treasury to ensure that these settings are protected.

As the chief executive of a provider working primarily in areas of deprivation, this takes my breath away. Do politician really think that it is only the 400 maintained nursery schools providing this vital service? That the 24,000 pre-schools and nurseries and 40,000 childminders have nothing to do with it?

This cannot continue. Whether the more recent impact of the 30 hours, or the longer drawn out effect of underfunding more generally, quality early years providers are falling by the wayside and the government isn't doing anything about it. The upcoming 2019 spending review is a chance to at least try to address this – but as it stands, the DfE hasn't given any indication that it is willing to even attempt to put the argument for more funding forward on behalf of the sector.

We've done the surveys, we've put forward the evidence, we've made the argument loud and clear. How many more providers is government willing to sacrifice before it finally starts to listen?

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