The extra £6 million per year includes an 11 per cent rise to the hourly rate paid to providers to deliver the 30 hours, as well as an additional £3.5m investment in the Welsh Government’s Flying Start scheme, which provides childcare for disadvantaged two and three-year-olds.
The move, announced by the deputy minister for social services Julie Morgan who carried out a review of funding rates, is intended to help provide greater sustainability across the childcare sector in Wales.
Morgan also committed to review childcare funding rates in Wales at least every three years, and announced an increase in the maximum amount settings can charge parents for food from £7.50 to £9 a day – designed to reflect the rise in food prices, utility and energy costs.
Julie Morgan, deputy minister for social services, said, ‘It is important childcare providers are paid a sustainable rate under the Childcare Offer. Research, published in November 2021, found the Childcare Offer has had a positive effect on profitability for more than two-thirds of childcare providers, but there have been calls to review the hourly rate paid for childcare through the Offer, particularly in certain parts of Wales.
This increase will help provide greater sustainability across the childcare sector in Wales, ensuring working parents can continue to benefit from the Childcare Offer. It will also enable the continued provision of high-quality care and education, giving children the very best start in life.’
'Operating costs are being driven higher and providers will be faced with an untenable position'
National Day Nurseries Association (NDNA) Cymru welcomed the announcement however warned that funding rates would need to be reviewed more regularly to keep pace with ‘ballooning costs’.
Chief executive Purnima Tanuku said, ‘Settings and providers have faced an incredibly difficult few years with the stresses the pandemic has put upon them. We were very pleased with the announcement from the Welsh Government in September 2021 that extended business rates relief for another three years. Nonetheless, with rising costs for energy, food and staffing, operating costs are continuing to be driven higher and providers will be faced with an untenable position.
‘It is vitally important that Government funding for early years and childcare places keeps pace with these ballooning costs, especially in a time of such economic instability. We welcome the commitment to regularly review the funding but this may need to happen more frequently if cost pressures continue to increase. Inflation is drastically rising and a commitment to review the funding every three years is beneficial in principal, but not frequent enough to help nurseries with these pressures. Reviews need to be carried out on a more regular basis.’
The Professional Association for Childcare and Early Years (PACEY) Cymru called the funding rise a ‘positive step forward in relation to supporting wider financial sustainability of all settings in Wales.’
