Alliance launches provider costs calculator as alternative to DfE template

It has been developed to help childcare providers respond to the Department for Education's call for evidence on how much it costs to deliver a place.

In February, the DfE launched a costs template for providers to fill in to help it understand how their costs are made up. However, the sector has criticised the template for being too broad and 'not fit for purpose'.

The DfE has now confirmed to the Alliance that providers can submit documents from its calculator instead. Documents should be e-mailed to earlyyearsfunding@education.gov.uk.

The calculator consists of two parts. One is a Word document which supports providers to identify and quantify all business costs and to calculate the total number of hours delivered at their setting. There is also an Excel spreadsheet where providers can enter this data, which will automatically calculate an estimated hourly cost of delivery for each age group.

The Alliance is encouraging as many providers as possible to complete the two-part calculator and submit all information to the DfE to ensure the Government has a clear understanding of the cost of delivering childcare and how this compares to funding rates.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘It is positive that the Department for Education has recognised more needs to be done to gain a better understanding of provider costs, but their template simply didn’t contain the necessary detail to do so. The template’s structure was far too broad and open to interpretation so the responses the DfE would have received were likely to have been subjective and inconsistent, and to have given an inaccurate impression of current delivery costs.

‘The frustrating thing is that we'd been here before: when the DfE conducted the Childcare Cost review call for evidence in 2015, it did not provide clear guidance on the data it needed and subsequently complained about the quality of data it received from, saying it was unusable. That was no surprise. Childcare providers have several income streams and variable outgoings and business structures: it's not possible for them return uniform data without proper guidance from the researcher.

‘We think the Alliance’s template addresses these concerns. A completed cost calculator will give the Government a much clearer idea of the true cost of childcare by giving providers the opportunity to provide meaningful data that has the level of detail needed to inform childcare policy.’