Parents pay the price for the 30-hour offer as childcare providers are forced to limit 'fully free’ places, new survey reveals

Parents are being forced to pay for the government’s 30 hour ‘free’ childcare scheme through additional charges and fees as a result of underfunding, new research from leading early years membership organisation Pre-school Learning Alliance has revealed.

According to an online survey of 1662 nurseries, pre-schools and childminders in England, the first to be published following the national roll-out of the policy in September, only a third of childcare providers currently rolling out the 30 hour funded childcare scheme are delivering the offer fully free (i.e. without any additional fees, charges or hours) to all parents, while nearly three in 10 providers offering the 30 hours aren’t currently providing any fully free places at all.

The findings follow repeated warnings from childcare providers that current funding levels – frozen by the government until 2020 – are too low, meaning that many are being forced to rely on additional charges to parents to fill the funding gap or risk going out of business. 

The findings show:

  • Only around a third (35%) of childcare providers are delivering 30 hours places ‘completely free’ to all parents, with a further 36% delivering fully free places to some, but not all, parents and 28% of providers delivering no fully free places.
  • 37% of respondents have introduced or increased charges for additional goods/services as a result of the 30-hour offer, including for items such as meals and snacks (80%).
  • Two-thirds of providers (66%) plan to make changes to how they offer the 30 hours over the next 12 months – most commonly by increasing fees and charges.

Amid numerous reports of childcare provider closures since 30 hours national rollout, the survey also reveals that: 

  • A fifth (21%) of childcare providers do not think their business will be sustainable in a year’s time due to government underfunding.
  • Over half (55%) of respondents say their funding rate is both less than their hourly parental fee rate, and less than the hourly cost of delivering a place.
  • More than three-quarters of providers (77%) say that if their funding rate stays the same next year, it will have a negative impact on their provision, with 44% of all respondents saying it would have a significant negative impact.
  • 38% of providers are uncertain whether or not they will be offering 30 hours places in a year's time.

Responding to the findings, Neil Leitch, chief executive of the Pre-school Learning Alliance, said: 

“With the majority of providers forced to limit the number of genuinely ‘free’ childcare places on offer, and many set to increase additional charges for funded hours in the next year, it’s clear from these findings that the government’s flagship childcare policy is failing both providers and parents. 

“Respondents have laid out in black and white that the 30 hours policy is simply not working, with a continued lack of adequate funding leaving many with no option but to pass the funding shortfall on to parents. This has left parents to pay the price for government underfunding through often unexpected charges for things like nappies, food and trips, while the government continues to claim that it’s delivering on its promise of ‘free’ childcare.

“Worse still, with early years funding rates set to be frozen until 2020 despite inevitable rises in childcare business costs such as wages, rents and pensions, the pressure on providers – and, in turn, parents – is only going to get worse. 

“Since the announcement of the 30 hours, the childcare sector has been very clear that, without sufficient funding, the scheme simply will not be viable in the long term – and thousands of parents and providers have now joined the Alliance’s Fair Future Funding campaign to demonstrate their concerns.   

“The government should not have needed more evidence of a childcare funding crisis – but here it is. If ministers don’t want to leave parents picking up their tab or to risk forcing even more providers to close, they need to recognise that the current situation is unsustainable and increase funding so it meets the cost of delivering places as a matter of urgency.”

Below is a selection of respondent comments to the survey. All survey responses were anonymous.

  • “We’ve had to increase fees from January 2018 and will be increasing again in April due to the NLW and NMW.”
  • “We will have to put up fees from April 2018 as our funding rate is staying the same and will not cover the pay increase for the new living wage.”
  • “We have implemented a registration fee to cover costs of daily diaries/ name cards/ learning journals/ name cards/ development records and to help with costs of consumables.”
  • “We offer very few places as the funding rate is so low for our London setting.”
  • “We may have to limit spaces for 30 hour entitled families in the summer term due to our group reaching full capacity.”
  • “We have lost a lot of money with the cuts. We are still struggling and with the minimum wage increasing  it will have a further big financial impact. We cannot afford to increase wages of higher qualified staff.” 
  • “We are already suffering financially and we will only see a few pence raise to funding per child and our staffing costs already exceed funding, so with the next large living wage increase, we may have to close our doors and thus the village will not have access to a community preschool. We have already have had to serve a redundancy.”
  • “Funding rate not increased for 7th year, coupled with cost of increased pension contributions and increase in living wage and minimum wage, we are seriously concerned about our future survival in the next few years.”
  • “Our running cost is £5.05 per child and we are getting £3.77 per child for the 30 hours.”
  • “It does not currently seem financially sustainable. If the funding rate does not increase, the only way we can still offer the places is by charging for extras a.k.a charging for the gap in underfunding.”

 

Notes for editors

ABOUT THE PRE-SCHOOL LEARNING ALLIANCE

  • The Pre-school Learning Alliance is the largest and most representative early years membership organisation in England. A registered educational charity, it also provides high-quality affordable childcare and education to support children and families in areas of deprivation throughout the country. 
  • The Alliance represents 14,000 member settings and supports them to deliver care and learning to more than 800,000 families every year. We deliver family learning projects, offer information and advice, produce specialist publications, run acclaimed training and accreditation schemes and campaign to influence early years policy and practice. 
  • The Alliance website is www.pre-school.org.uk 
  • The Alliance is running the Fair Future Funding campaign, which calls on the government to ensure that early years funding meets the rising cost of providing 'free entitlement' places. The campaign has more than 5000 supporters to date.

 

FULL SURVEY RESULTS

How would you describe your provision?

Full daycare nursery/pre-school: 32.2%

Sessional nursery/pre-school: 42.7%

Childminder: 22.3%

Maintained nursery school: 0.9%

Primary school nursery class: 0.6%

Out of hours club: 0.1%

Other: 1.3%

 

Is your current funding rate (including any supplements) more or less than it was last year?

More than last year: 47.9%

Less than last year: 21.9%

The same as last year: 30.2%

 

Is your current funding rate:

More than your hourly parental fee rate: 16.8%

The same as your hourly parental fee rate, but more than the hourly cost of delivering a place: 8.9%

Less than your hourly parental fee rate, but more than the hourly cost of delivering a place: 10.6%

Less than your hourly parental fee rate, but the same as the hourly cost of delivering a place: 9.0%

Less than your hourly parental fee rate, and less than the hourly cost of delivering a place: 54.6%

 

Are you currently offering any 30 hours places?

Yes: 75.7%

No: 14.9%

We are not providing any full 30 hours places but are splitting one or more places with another provider/other providers: 9.4%

 

The following questions were asked of providers currently offering 30 hours places:

 

Have you put any restrictions on the days of the week or times of the day that parents can access the 30 hour entitlement?

Yes: 30.3%

No: 69.7%

 

Does the way you offer the 30 hours differ for parents who are only taking up funded hours versus parents who are taking up additional hours and/or paying for extra goods/services?

Yes: 13.6%

No: 86.4%

 

Have you increased your fees for non-government funded hours as a result of offering the 30 hours?

Yes: 35.2%

No: 64.8%

 

Have you introduced or increased charges for additional goods/services as a result of the 30 hour offer?

No: 63.1%

Yes: 36.9%

 

What charges have you changed? (please select all that apply) this question was asked only of those who answered 'yes'' to the previous question.

Introduced or increased charges for meals and snacks: 80.3%

Introduced or increased charges for nappies: 10.4%

Introduced or increased charges for trips: 32.3%

Introduced or increased charges for other goods or services: 47.1%

 

Have you limited the number of 30 hours places you offer?

No, we have offered to all eligible parents: 67.5%

Yes, limited to some extent: 24.2%

Yes, significantly limited: 8.3%

 

Have you had any parents wanting to take up the 30 hours at your provision who you did not offer a 30 hour place to due to a lack of capacity?

Yes: 18.9%

No: 81.1%

 

Have you had any parents wanting to take up the 30 hours as your provision who you did not offer a 30 hour place to because they want to take up funded hours only (i.e. they didn’t want to pay for additional feeds or goods/services?)

Yes: 11.5%

No: 88.5%

 

Approximately what proportion of the 30 hours places you offer are delivered ‘completely free’ (i.e. parents do not pay for additional hours, or goods/services)?

None: 28.4%

Less than 25%: 16.7%

25 - 49%: 5.6%

50 -74%: 6.0%

75 - 99%: 7.8%

All of them: 35.5%

 

Have you received any parental complaints relating to the 30 hour offer?

Yes: 25.6%

No: 74.4%

 

What has been the focus of the parental complaints you have received? (please select all that apply) - this question was asked only of those who answered 'yes'' to the previous question.

Being asked to pay additional fees/charges: 25.2%

Not being able to access preferred sessions: 20.3%

Not being able to take up a place at your setting: 13.8%

The 30 hours only being available during the term time: 16.1%

Not being able to take up a full 30 hours per week due to the setting offering places on a ‘stretched’ basis: 10.6%

Difficulties in applying for the 30 hours online: 84.2%

Confusion over eligibility criteria: 53.6%

Confusion over when their child can start accessing the 30 hours: 44.1%

Other: 23.8%

 

How has offering 30 hours places impacted on the availability of universal (15 hour) three- and four-year-old places at your provision?

The number of universal three- and four-year-old places we offer has increased: 4.9%

The number of universal three- and four-year-old places we offer has decreased: 25.4%

The number of universal three- and four-year-old places we offer has stayed the same: 69.7%

 

How has offering 30 hours places impacted on the availability of places for younger children at your provision?

The number of places for younger children we offer has increased: 5.0%

The number of places for younger children we offer has decreased: 24.3%

The number of places for younger children we offer has stayed the same: 70.7%

 

What financial impact has 30 hours had on your provision so far?

It has had a significant positive financial effect: 3.5%

It has had a somewhat positive financial effect: 9.4%

It has had a somewhat negative financial effect: 17.1%

It has had a significant negative financial effect: 18.6%

It has had neither a negative or positive financial effect: 13.1%

It’s too soon to say: 38.4%

 

Have you analysed the impact that the increase in national living wage/minimum wage in April 2018 might have on your provision’s finances?

Yes: 59.2%

No: 34.9%

I wasn’t aware the national living/minimum wage was due to increase in April: 5.9%

 

Have you had your funding rate for next year confirmed yet?

Yes: 23.4%

No: 65.5%

We’ve been told a provisional rate but this has not been confirmed: 11.1%

 

If your funding rate stays the same next year, what impact would this have on your setting financially?

Significant positive impact: 1.1%

Somewhat positive impact: 3.7%

Somewhat negative impact: 33.3%

Significant negative impact: 44.1%

Neither positive or negative impact: 17.9%

 

How certain are you that you will still be offering 30 hours places in a year’s time?

Very certain: 26.2%

Somewhat certain: 33.6%

Somewhat uncertain: 26.5%

Very uncertain: 11.8%

We have already decided to stop offering places: 1.8%

 

Assuming you are offering 30 hours places in a year’s time, do you expect the number of 30 hours places you offer to have:

Increased: 29.7%

Stayed the same: 59.1%

Decreased: 11.2%

 

Do you think you will make any changes to how you offer the 30 hours over the next 12 months? (please select all that apply)

No: 33.6%

Yes, likely to increase fees for any additional paid-for hours: 37.1%

Yes, likely to increase fees for children of other ages: 32.7%

Yes, likely to charge for goods and services that were previously provided for free: 27.2%

Yes, likely to increase existing charges for goods and services that we already charge for: 20.4%

Yes, likely to restrict the days and times when funded places can be accessed for the first time: 14.8%

Yes, likely to place further restrictions on the days and times when funded places can be accessed (i.e. on top of existing restrictions): 9.3%

Yes, likely to reduce staff-child ratios (within legal limits): 17.2%

Other (please specify): 4.3%

 

Do you think that your setting will be sustainable in 12 months' time?

Yes: 79.0% 

No: 21.0%

 

The following questions were asked of providers not currently offering the 30 hours 

 

What financial impact has not offering the 30 hours had on your provision?

Significant positive impact: 4.4%

Somewhat positive impact: 3.5%

Somewhat negative impact: 14.6%

Significant negative impact: 17.3%

Neither positive nor negative impact: 60.2%

 

Do you think that your setting will still be sustainable in 12 months’ time?

Yes: 69.6%

No: 30.4%

 

How likely would you be to offer 30 hours places if your funding rate increased?

Very likely: 29.2%

Somewhat likely: 29.7%

Somewhat unlikely: 13.6%

Very unlikely: 27.5%

 


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