Early years
but late with
the hours

On the face of it, increasing free childcare from 15 to 30 hours a week is a good thing. But the scheme has caused anxiety for parents and financial uncertainty for nurseries and councils 

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Tears, sleepless nights and low mood are things you can expect in the first week of infancy. For many parents and childcare providers, the government’s flagship 30 hours free childcare scheme has been a textbook baby.

It arrived into the world on 1 September, weighing in at £1 billion, after months of uncertainty. In contrast to the previously available 15 hours free childcare – a Labour initiative available to all and focused on providing children with quality early years education and preparing them for school – the primary objective of this Conservative pledge is to support parents into work through a reduction in childcare costs. It’s only available for families in which both parents are working and earning £16,000-£100,000 a year.

They could begin applying for funding earlier this summer through the new Childcare Choices website but it was dogged with technical problems. Many parents were unable to verify their details or log into their accounts and the helpline often threw up more problems than it solved.

Last month Nicky Morgan, chair of the Treasury Select Committee, wrote to HMRC demanding answers. But a new compensation scheme will only pay costs “directly caused by the service not working, mistakes or unreasonable delays” rather than for inconvenience. Most parents won’t be entitled to it.

“It’s been a fiasco. I tried straight away and I couldn’t log in,” says Laura Pattison, a Leeds mum of two whose three-year-old son Dexter is entitled to funding. “It’s taken me months to finally get my code and that was because I really whinged on the phone. I kept on being bounced around between different people telling me different things.”

Grundy says term time-only funding doesn’t fit in with parents’ work schedules

Like 44 per cent of eligible parents who applied, just days before Dexter was due to start the new term, Pattison’s code from Childcare Choices – exchangeable for the funded place – had not been validated. The Department of Education told Big Issue North this was because many childcare providers were closed until the start of the September term and the validation process needed to go through them.

So should Pattison take Dexter to nursery on the first Monday back? As a single working parent about to embark on a master’s degree, she doesn’t have a choice but the DfE assured Big Issue North that if a code had been provided, his funding would go through.

The oxytocin hasn’t quite kicked in yet though. Beside the problems with the application process is a more fundamental concern – that the new scheme is underfunded by central government, putting pressure on local authorities, nurseries and parents. In a week when a National Association of Head Teachers poll of its members found that many children are not ready to start school when they first enter a classroom, the importance of pre-school care is clear. But will the resources follow?

Even with 30 hours funded Pattison will still be paying around £300 a month for childcare. Dexter’s nursery requires the 30 hours to be spread out over five days, six hours a day, 9am-3pm, for 38 weeks of the year. But it bills parents by the full day, 8am-5pm – meaning Pattison still has to pay £15 a day. On top of that the nursery doesn’t actually have space for Dexter one day out of the five, so he is only using 24 of his funded hours. She’s also being asked to pay for lunches and milk – and is frustrated.

“It feels as though they’ve put me in a position where I have to pay that and there’s no wiggle room. And they’ve done that knowing Dexter’s happy and settled there and I won’t move him.”

Her story is not unique. Research by the Huddersfield-based National Day Nurseries Association (NDNA) last month found most nurseries offering the 30 hours were limiting places or making extra charges to parents for provisions such as food and lunchtime supervision. One in five are opting out of the scheme entirely. Nurseries say they are equally frustrated.

“My funding has been reduced by £1.47 an hour from what I received when we provided 15 funded hours,” explains Pamela Grundy, manager at Highmeadows Day Nursery in Bolton. “The funding just doesn’t cover the cost of childcare. It costs an average of £5.20-£5.50 an hour to provide care and education for the children and we’re only getting £4 an hour.”

The DfE pays for the childcare scheme by funding local authorities, which in turn pay nursery providers. The DfE stipulates that providers cannot ask parents to directly top up the hourly rate.

The DfE says no local authority will receive less than £4.30 an hour and councils must pass on a minimum of 93 per cent of that to childcare providers – £4. In April, this will increase to 95 per cent.

Based on the 27 councils that provided figures in the North West and Yorkshire to NDNA, the average in the north is just £4.14 an hour. Only one northern local authority is paying the promised average – Bradford at £4.94 – and two are paying below the DfE’s recommended minimum of £4 – East Riding, £3.98, and Oldham, £3.88.

“It is very concerning that most northern local authorities are paying hourly childcare funding rates below the national average,” says NDNA chief executive Purnima Tanuku. “The Department for Education created a new Early Years Funding Formula which was intended to iron out any unfair historical anomalies that existed from one authority to another.

“They took into account staffing and premises costs with adjustments made for economic deprivation using the free school meals measure, children who have English as an additional language and children with special educational needs and disabilities (SEND).”

An Oldham Council spokesperson said it made up the shortfall from the £3.88 actual figure to the stipulated £4 minimum through separate grants – even though its central government funding has fallen from £4.41 an hour to £4.35.

The Local Government Association’s Richard Watts insists that council are “committed to ensuring that parents have access to high quality, flexible childcare so that all children get the best start in life”, but adds: “Councils remain concerned that the increase in funding will not be enough to secure this provision for everyone who wants it. These concerns are particularly around the impact on quality of provision, with a risk that insufficient funding will lead providers to employ less qualified staff, or struggle to provide enough support for children with additional needs or disabilities.”

Grundy employs two Early Years teachers among her staff and says she will “fight forever to keep them”. But she says she is not on a level playing field with nurseries within infant schools because of the business rates and taxes she is required to pay. These costs, as well as pay rates, are set to rise but the childcare funding rates are fixed until 2020.

“The problem is it’s been advertised as ‘free’ rather than ‘funded’ and parents expect it to be free and flexible but we’re not able to do that. We’re open 7am-6pm so that’s what my staff work. We’re not able to offer them 9am-3pm school hours so I have to charge for wraparound care as well as lunches.”

The DfE did not respond to Big Issue North’s questions about the funding shortfall but pointed to a new independent evaluation of the government’s pilot scheme in four areas, including North Yorkshire and York.

Most nurseries offering the 30 hours are limiting places or making extra charges

Although the report acknowledged that calling the childcare “free” had proved misleading in some cases, and pointed out that the financial impact for providers had a “tendency towards higher costs and lower profits”, it concluded there is no specific reason to believe that 30 hours free childcare will not be a success, adding there was “no evidence that financial implications were a substantial barrier”.

Parents were keen to take the 30 hours up, it said, allowing longer work hours for mothers and fathers and some indication of higher work retention for mothers. There were “additional perceived benefits for families in terms of enhanced work opportunities, direct financial support and broader wellbeing”.

The DfE also quoted Lesley Calvert, manager of Funfishers Preschool in York, saying it had been “a real success for us”. But Calvert tells Big Issue North that Funfishers is not a “normal, conventional” nursery. “We’re a charity. We’re not for profit. We offer low cost childcare for the community. That’s
what we want to do to make it viable for parents.”

Funfishers’ parents pay for three hourly sessions, rather than the full day that causes the likes of Pattison problems, and it broke even. “Other nurseries costs are higher,” Calvert points out.

She praises the support of City of York Council but says: “To make it work long term we may have to change our prices because wages go up – everything goes up.”

Grundy is worried that the children of parents who can’t afford to subsidise the nurseries’ costs will suffer. “We have our local football club come in to do sessions, we have a dance teacher, we have a French teacher, we do forest school and we’re having to charge for these things now, but we don’t want to leave children out whose parents can’t pay. We’re supposed to be an inclusive setting – that’s what Ofsted and the government want us to be, and we should be – so they shouldn’t put stipulations on us that create a culture that stops us from being inclusive.”

She adds that term time-only funding does not fit in with most parents’ work schedules and points out the huge difference between the bottom and top earners who are equally entitled. “If somebody who earns £100,000 a year wants me to fund 30 hours of childcare, free, that’s a bit strange.”

Tanuku is concerned that disadvantaged children – who currently get childcare funded from the age of two – could suffer as a result of the 30 hours scheme. “Research shows that 15 hours of free childcare for these young children can improve their life chances and help reduce inequality.

“There is a danger that nurseries will offer fewer funded places to eligible two year olds as the 30-hour policy comes into force. Our annual survey this year showed that more nurseries are choosing not to deliver these places to disadvantaged twos.”

She says some NDNA members have been forced to close completely.

“This pocket money funding rate is just not enough to cover their delivery costs. The only way the sector will survive is by putting up fees for children under the age of three.”

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