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Childcare costs to soar if DfE freezes early years funding

The Pre-school Learning Alliance has today warned that if the government goes ahead with plans to freeze early years funding rates until 2019/20, childcare costs are likely to be on the increase.
Freedom of information (FOI) requests, filed by the Alliance, have shown that early years funding rates have failed to keep pace with inflation in 75% of local authorities across the UK over the past five years. During this time childcare costs have risen an average of 4.6% per year.
Neil Leitch, chief executive at the Pre-school Learning Alliance, said that the government’s failure to ensure appropriate funding for the sector has led to the increase in childcare costs in recent years.
“So it beggars belief that it thinks that a one-off increase in average funding rates is enough to sustain the sector for the next three years, especially given that this increase will still leave a significant funding gap in many areas, including those seeing a drop in funding next year,” Neil said.
Staff costs account for 70-80% of overall costs for providers, and by 2020 the national living wage will have increased from £7.20 to £9 an hour.
“If rising delivery costs aren’t matched by increases in funding, providers will once again have to choose between increasing the cost of paid-for hours or going out of business,” Neil said.
“Either way, it will be parents or providers who end up paying for a promise that government made.”
The Alliance has today launched its early years funding campaign, Fair Future Funding.