New budget - I'm excited!

Imagine that, during an election campaign, the Government promises to extend the 45p per mile business travel allowance so that all workers can claim a generous amount of free petrol a week. They've calculated that this will be very popular with voters.
The workers are delighted and rush to vote for the Government.

After the election, the Government quietly approaches the petrol companies. "We'll only pay for half that free petrol. You must absorb the cost of the rest. You're not allowed to tell anyone and you're not to go charging extras. If you refuse to offer it, you'll lose business to the companies that have agreed to offer it.
We want the workers to believe we are a generous Government giving them free petrol or they won't vote for us again."

One company embraces the new rules and offers the free petrol to everyone (the owner is a friend of the Government). It takes the hit because it's a multi-national company and it can afford to hold out for now (it's also been well compensated).

The other petrol companies gradually go bust because they can't afford to provide the free petrol and meet their costs. They stop trading until that one company is almost the only one left.

Oh, now they've got the workers where they want them! They increase the cost of petrol, make up their losses and people end up paying far more because there is little alternative. The workers struggle to find petrol stations, where petrol is charged at a premium and withdrawn when their staff can't cope with the demand. The workers are expected to be grateful for anything they can get.

In a very simplified way, that's what's happening with childcare.

We warned back in 2015 that extending the "free" entitlement would actually raise fees for parents and reduce availability. We explained that the Government wasn't even funding the 15 hours adequately and asked where the money was coming from to extend the scheme.
We were ignored.

Yes a setting could choose to only offer 15 of the 30 hours and charge a premium for anything over 15 hours. A lot already do and also specify only a limited number of funded hours per day can be used with premium rate charged for other hours. The issue with this is that parents expect their 'free' 30 hours and then lots are quite rightly miffed when they can only access 15 of the 30 hours and have to pay hundreds of pounds on top.

If the government does increase the 30 free hours to include 1&2 year olds, it may become far more common for nurseries to offer it in the way you've described above. I'd more than happily pay the difference between what the government provides and what the nursery needs - I know it's not currently set up in a way that allows nurseries to directly charge that difference but I'd pay that amount through whatever set up worked.

I’ve always said a voucher system would be better. Parents and caters receive a voucher towards childcare that can only be redeemed by the setting. The voucher would be for X amount with the understanding that parents/carers have to top up the rest according to the setting’s hourly rate.

Yes a setting could choose to only offer 15 of the 30 hours and charge a premium for anything over 15 hours. A lot already do and also specify only a limited number of funded hours per day can be used with premium rate charged for other hours. The issue with this is that parents expect their 'free' 30 hours and then lots are quite rightly miffed when they can only access 15 of the 30 hours and have to pay hundreds of pounds on top.

In my opinion, the only way the government can fix this problem is upping what they pay childcare settings so that they are not at a loss from taking on funded children then the hours will be truly free for parents. However, I don't think think the government has the foresight or budget for this.

But if they said we could have the 30 hours and then we top up to what they need to what the government will give them, that would still save me loads of money! I'd happily pay the difference

I’m dreading what may come of this, I’d like to say that settings will be properly funded but they won’t be. I get £2.55 less than my hourly rate as it is and I’m only paid twice a term. It just keeps getting worse and I’m considering closing as everything is so challenging with money. I try and provide a caring and nurturing service but I can’t do that if I can’t pay my bills 😔

I agree, i know so many people who would love to be able to have more time at home with kids but have had to go to work to cover bills... it won't happen though its only going to get worse with the cost of living increasing.

@BernadetteIsMySister "a Whitehall source" 🕵️

Could a childcare setting say they’re only offering 15 hours of the 30 hours funding for 1 and 2 year olds and children must attend for a minimum 30 hours a week… then charge a higher rate for the remaining 15 hours and make up their weekly total that way?

I have a 5 year old, 2 year old and 5 month old. I’m going back to work end of July and my August childcare bill is £2600. We planned and budgeted for this, and since cost of living issues I’m going back to work earlier than planned so we’re not so long without my wage. The next 3 years we knew were going to be really tight and pretty rough until my kids are in school/30 hours funding. So extending some funding to my 2 year old and my 1 year old when she turns that age would really help. Just trying to work out how my childminder could make use of the scheme so she doesn’t lose out and I can still benefit.

(Before ppl come at me, yes we planned for 3 kids, we can pay for them and we’re prepared for the sacrifices and yes it is up to my childminder what she ultimately does in her setting).

We have state run community nursery schools. Poorly funded, running at huge deficits because they have qualified teaching staff and a headteacher. Government has not promised any extra support to them or committed to them being open in the long term.

Schools may take on younger children but only works financially as ‘governor led’ otherwise as a nursery class in school, again there is a requirement to have a qualified teacher. I know of schools with a nursery class, where they are running at a loss of £25,000-£35,000 per year. Unsustainable under poorly funded school budgets.

It is legal though? In that you can set a charge for consumables like food/nappies?
I don’t want my childminder to run herself into the ground for me, I want her to earn a good amount but, as much as is feasible, utilize the schemes available to us in a win/win?
it is genuine ignorance I don’t know what the shortfall is per hour as I don’t know what our LA funding is per hour.

My understanding (could be wrong) is that nurseries aren’t obliged to offer the 30 free hours currently, is that right? If so, I assume the government is thinking they’ll say they’re offering it, but it’s not their fault if nurseries aren’t. Knowing full well they aren’t paying enough for nurseries to be able to offer it.

I'm not charging a top up because a) it's illegal to charge top ups and b) because the parents simply wouldn't be able to afford it.

I never became a childminder to rip people off but I've spent all the years I've been a childminder hearing how the childcare sector rips off parents, how we must be creaming it in until I stop people in their tracks and ask them how much they would want to be paid and if they would be happy to swap roles.

If childcare providers upped their fees in line with nmw and inflation we'd price ourselves out of work. Nobody who goes into work in this sector through greed they do it because they want to offer the best service and experience for all children but this is becoming increasingly difficult hence why there's such a shortage of spaces currently because settings are being forced to close in order to survive.

I don’t think it’s necessarily true that higher ratios is a bad thing- when we lived in the US DD’s 2’s class at daycare was 1:8 (but they voluntarily took an extra adult for outings so 1:6) and it was fantastic, France is also 1:8, whilst Germany, Denmark and Sweden don’t even have legal ratios. It probably all comes back to the same old chestnut that English nurseries can’t pay enough to keep well qualified experienced staff, because the funding they get from the government is a fraction what it actually costs to look after a child, so they’re relying on their younger children to subsidise but there’s a limit to what parents can afford to or are willing to pay. And this new policy will just make this worse, not better unless they’re going to change the way the funding works.

There is a rumour in the childcare sector that if all private nurseries and childminders are forced to close through lack of funding for the childcare sector then the government (although more of a Labour idea) will ensure that all primary schools take on children from nursery age and will be state run childcare.

I agree and I'm the same. As a childminderni won't increase my ratios, its not safe or fun for anyone!

However that doesn't matter to the government, it will just absolve them of they obligation to.pay a decent rate by telling settings they could always take on mire children. It puts the blame on the settings when they close then doesn't it?

@Led9519 as it stands childcare settings are not allowed to charge top up fees for funded places. They can charge for "consumables" but it has to be made clear to the parent that this is voluntary. Parents can choose not to pay the voluntary charge which a lot do. Some nurseries say parents must pay the voluntary charge or the space is not available. Some settings charge a premium for 1and 2 year olds to cover the shortfall of 3 and 4 year olds.

Same here 😕 I love my job, but the nursery I work in is already running at a loss and we cannot recruit new staff. I think this will be the end for us.

If my 2 year old was to receive 30 free hours now, I'd be happy with that even if the nursery put the prises up. So say my bill would've gone from £1,000 to £400 but would instead go down to £500/600 id still be saving money and the nursery would gain more out of it so surely win win?

Might have missed it but if the childcare settings are losing out why aren’t they charging an appropriate ‘top up’ for food to make up the difference or on the weeks of the year that aren’t covered by the funding? Surely there can be a way to do this. So if a nursery charges £75 a day and a parent needs 10 hours of childcare a day can’t the nursery get 6 hours funded of £5, charge additional 4 hours at £10 and £5 food on top? That’s £75 but the parent only paying £45 and is £30 a day better off?
or… if ppl start only using 6 hours increase the food bill?
Not sure I understand why nurseries can’t get it to work for them given the flexibility to charge for extras?

But even if they do increase ratios, doesn't mean childcare settings will take on more kids. All the childminders and two nurseries local to me do not want to take on more children as increased ratios means increased risk as there is less adult supervision and accidents will be more likely to occur. Unless you just have the increased number of kids sat in front of a TV all day.

I don’t understand which part of my post you’re replying to. I don’t think we should be “throwing money into the pockets of SAHMs”?

Who is 'they' in this quote?

You can guarantee that the Guardian have just skimmed out the fun stuff and when the details actually come it it won't be anywhere near as exciting as it sounds. There will be little nuances in the fine print that mean the nurseries end up paying more and the parents still have to top up ridiculous amounts. "Free" is just a fancy word to make it sound like they are helping when they aren't.