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Underfunding pushing up costs for parents, suggests new research

A new DfE report on providers’ finances shows that the hourly fee charged by settings for three- and four-year-old places is on average 58p higher than what they receive in funding.

According to the report, which is based upon evidence from the latest Survey of Childcare and Early Years Providers, carried out in Spring 2018, it is private providers that charge the most, with fees ‘substantially’ higher than the funding rate at an average of £1.10 more.

The report is by Frontier Economics and NatCen on behalf of the Department for Education (DfE).

The mean hourly rate charged by private providers for three- and four-year-olds is £5.48.

Voluntary providers’ fees are around 48p higher than the funding they receive, 37p higher for childminders and 49p higher for nursery classes.

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