Nursery World - Analysis: The Comprehensive Spending Review

Nurseries and children's centres tell Karen Faux how they see the changes in the spending review affecting them and the families they work with.

Over the coming months, the nation's families will find it increasingly hard to cover the costs of good quality childcare. This is the undivided opinion of providers we spoke to in order to gauge response to George Osborne's long-awaited Comprehensive Spending Review.

While offering the free entitlement to disadvantaged two year-olds is viewed as a positive, providers' overwhelming concern is with the extent to which cuts will jeopardise services and business sustainability.

- Peter Catling, centre head, Woodlands Park Nursery School and Children's Centre in Tottenham, north London

'Although the money to children's centres is safeguarded, it isn't ring-fenced, which means that what goes on at a local level will be crucial. In our borough there is a commitment to children's services, so we would expect that to carry through.

'The wider context to this is that the families using us will be harder pressed, and that will create more pressure on our services. Changes to benefits will mean that many families are pushed close to the edge, and likewise, if there are cutbacks in local authority services because of the reduction of grants, we may not be able to work with some of our historical partners. This will impact on integrated working.

'At the moment it is not completely clear what greater targeting will mean for children's centres, but it is vital that they remain a universal gateway, and retain the core of what they do. If they become just for the needy, we lose the potential for families to support each other. At the moment our centre is popular and well-received because it is not a stigmatised service.'

- Claire Richmond, manager of Goslings Day Nursery in Coventry

'We are not in a deprived area but we have a very high level of parents who pay for the greater part of our fees with the childcare element of Working Tax Credits.

Our fees are high because we are a high-quality setting and deliver a lot to parents for their money.

'Ultimately, the reduction in tax credits will not affect our numbers but it will affect our quality, because we will not be able to maintain our current fee levels. Parents simply will not be able to afford them.'

- Rachel Jones, managing director, Fit 'n' Fun Kids, Falmouth, Cornwall

'We are more concerned about the increase in working hours as a criteria for tax credits, rather than the drop in coverage from 80 to 70 per cent of childcare costs. Around here, jobs are sparse at the moment and while employers may be able to meet the 16 hours, they will be struggling to meet 24. If these parents are not going to get the tax credits to pay for nurseries, nurseries are not going to be sustainable.

'At the same time, we are positive about the funding for two-year-olds, welcoming the opportunity for children to begin interacting at a younger age. In Cornwall this will add to sustainability.

'We have been lobbying the Government to move to supplyside funding, as we have a lot of problems with unpaid fees from parents receiving tax credits.'

- Peter Gerrard, head of East Staffordshire Children's Centre

'Initially, the fact that Sure Start is not being cut sounds positive, but then when one thinks about it being frozen, that starts to feel like a cut. Is the free entitlement for disadvantaged two year-olds coming out of separate funding or the single frozen resource?

'Most worrying is that ring-fencing has gone. With local authority cuts of around 30 per cent, we are going to lose support. Who is going to keep an eye on local authorities to see how they are interpreting Sure Start funding? Who will hold them to account?

'It is vital that children's centres are both universal and targeted. The mix here is of enormous benefit to all children and families. The more affluent families generate revenue that facilitates our capacity to offer services. Additional needs are addressed collectively as part of a balanced service that works extremely well at our own centre.'

- Jacqui Mason, managing director, Children 1st @ Breedon House with nurseries in Leicestershire, Nottinghamshire and Derbyshire

'We are very concerned about how the changes to Working Tax Credits will affect our staff. We have just given everyone salary increases, but with the reduction in the amount of credits that can be claimed against childcare, this rise is going to be negated.

'However, we feel the rise to 24 hours is possibly going to be a bigger problem. We employ a lot of ancillary staff and we are not in a position to increase their hours to 24. This could mean we lose staff.

'As an employer and a business we are concerned that these changes will affect parents' ability to afford good quality childcare.'

APPRENTICESHIPS: A NEW GOLD STANDARD?

Sally Eaton, educational director, The Childcare Company

'Apprenticeship funding is to become the core way in which people will gain qualifications for the sector. In the past it has sometimes been difficult for older people to gain apprenticeship funding, but I'm delighted that this will now change.

'All apprentices will undertake either the Level 2 Certificate or the Level 3 Diploma for the Children and Young People's Workforce, along with the other new elements that have been introduced which now make apprenticeships very well rounded. Employers will have to make a contribution to the training of apprentices over the age of 19.

'Those who already work in a setting and want to gain a Level 3 can apply to become an apprentice. It could also encourage more school leavers to enter the sector.

'The Government seems to have the aim of returning apprenticeships to a gold standard. If that ethos is developed, we could see more people opting to undertake an apprenticeship rather than going to university. Those with degrees will not be eligible for apprenticeship programmes.'

- John Lakin, education partner at Pricewaterhouse Coopers

'The 750,000 increase in adult apprenticeships is welcome. However, the problem is always gaining employer placements, particularly in the current economic environment. The National Apprenticeship Service will need to review the capacity and efficiency of its current operations and structure to ensure that it can provide the support needed to make the proposed increase in places a reality.'

THE CSR: KEY POINTS FOR THE SECTOR

Introduction of a new fairness premium, worth £7.2bn in total over the spending review period, to support the poorest which includes: an extension from 2012/13 to 15 hours per week of free early education and care to all disadvantaged two-year-old children; a new £2.5bn premium targeted on the educational development of disadvantaged pupils.

Ending and rationalising a range of centrally directed programmes and instead streamlining funding for the most vulnerable children and families in a new £2bn Early Intervention Grant to ensure local authorities have greater flexibility.

Providing capital funding for new schools, rebuilding or refurbishing over 600 schools through the reduced Building Schools for the Future programme and investing in new school provision in areas of demographic pressure.

Protecting funding for Sure Start services in cash terms, including new investment in health visitors.

The Universal Credit will be introduced over two Parliaments to replace the current system of means-tested working age benefits.

Net welfare savings of £7bn a year will include withdrawing Child Benefit from families with a higher rate tax payer, controlling the cost of tax credits and capping the amount a workless household can receive in benefits.

The childcare element of the Working Tax Credit will go down from covering 80 per cent of costs to 70 per cent. Parents will also now have to work at least 24 hours a week to meet the new criteria. Parents who can currently claim the maximum of £240 a week, will in the future only be able to claim up to £210 a week.

The Government will look to extend the use of personal budgets across a range of service areas, including special educational needs. More detail on this policy will be set out in the forthcoming Green Paper on SEN and disability.