The sector is currently weathering the storm of a £662 million funding deficit. Worse is yet to come. In December 2019 independent researchers, CEEDA, estimated that a Conservative election victory would result in a 2020/21 funding deficit of £824m based on average wage growth of 3.6 per cent. Announcements this month on statutory pay rises will push this figure higher.
In April the National Living Wage will rise by 51 pence, to £8.72 per hour (6.2 per cent). A similar rise is in store for 21- to 24-year olds, with an increase of 50 pence to £8.20 per hour (6.5 per cent). The government has committed to a funding increase of just £0.08 per hour (1.8 per cent). Whilst there is no doubt that pay increases are much needed by the sector’s workforce, without additional funding they could lead to job losses and closures.
What can the sector do to halt spiralling losses on funded places? Looking ahead to the budget on 11 March, Ceeda is conducting a short survey in collaboration with Nursery World.
The aim of the survey is to support transparent debate on childcare policy and funding, and to encourage collaboration on solutions. The survey will feed into ‘The Big EY Debate,’ a one-day event hosted by Ceeda in central London on 23 January, streamed live across the country.
Dr Jo Verrill, managing director of Ceeda, said, ‘Whilst ‘free entitlement’ funding works for some providers in some parts of the country, it is threatening supply, reducing equality in access, and increasing fees for parents in many others. That there is a major problem is no longer in question, the solution is less clear. We urge the sector to come together and take part in this important survey and debate.’
Nursery World will publish the results of the survey and roundtable debate in the coming weeks, alongside a report produced by Ceeda.
Liz Roberts, editor of Nursery World, said, ‘From what our readers tell us about their struggles to be sustainable, it is clear that urgent action is needed. The early years sector needs to join together to make robust and effective representations, and we encourage everyone to respond to this poll and contribute to the debate.’
Neil Leitch, chief executive of the Early Years Alliance, said, ‘The facts around funded entitlement are clear: parents are not getting truly ‘free’ hours and providers – particularly those in deprived areas – are struggling to stay open. There is one simple reason behind this and it is simply that funding levels bear no relation to delivery costs. They didn’t cover outgoings when they were rolled out and subsequently frozen in 2017 and, almost three years of cost increases later, they certainly don’t now.
‘What’s less clear is how we as a sector respond to this funding crisis. That’s why it’s important that childminders, pre-schools and nurseries of all types get involved in a full and frank conversation about what happens next. It is up to us, along with the politicians and other decision makers, to decide what childcare in this country is for. Do we want a sector open only to those parents who can afford it? Or do we want to build a service that lifts the poorest children up and helps them to achieve their full potential? These are the vital sort of discussions we can help frame in the latest Ceeda survey and Big EY Debate event later this month.’
- Take part in the survey here and find out more about the event here.
- Closing date for survey 10 February.
