Sky-high childcare costs are a huge burden on parents and one reason many mothers (or, less often, fathers) don’t go back to work – for many, it just doesn’t make financial sense. So the Tories’ plan to double free childcare for three and four-year-olds to 30 hours a week, and bring it forward by a year, should be electoral catnip.
But the plans, announced in last week’s Queen’s Speech and due to start as a pilot in September 2016, have been roundly criticised by nurseries. The Pre-School Learning Alliance, which represents 14,000 private and voluntary childcare providers said the current 15 hours a week is already 20% underfunded. But that pales in comparison to its conclusion that the Government’s estimated cost of £350m is only a quarter of what would be needed to fund the new policy.
‘The so-called 'free' childcare scheme is nothing of the sort. For years now, the initiative has been subsidised by providers and parents because of a lack of adequate government funding,’ its chief executive Neil Leitch said.
That was backed up by a report released today by the Professional Association for Childcare and Early Years, which said nurseries are being ‘forced to cross-subsidise their free places through higher fees, or retracting the number of funded places.’
The Government has said the policy will be worth £5,000 a year for 600,000 families with an income of less than £150,000. But earlier this year, the Family and Childcare Trust Survey found the cost of full-time nursery was now a staggering £11,000 a year.
So it would probably be more accurate to call the policy, which, ‘subsidised’ rather than ‘free’ childcare. But Leitch also highlighted an additional problem: the ability of nurseries to expand to fulfil demand.
‘There are many nurseries that can't physically extend their number of hours,’ he said. ‘They may operate in a church hall or community centre. Nobody has considered whether in fact they will be able to offer the 30 hours.’
The market should eventually correct that, of course. But that will take time – something David Cameron admitted on ITV this morning. Meanwhile, employment minister Priti Patel told the BBC, ‘We know that funding rates need to increase,’ and that the £350m estimate wasn’t yet final.
Something needs to give, then. For nurseries that have the space to expand now this could be a big business opportunity. But many others may struggle to meet demand and it remains to be seen if the Government will get its sums right and actually lift the increasing burden of childcare for working parents.