Guest post: "This new childcare policy should save around £5,000 per year for each child"

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This week sees the start of the new school year.

As much as the school holidays can be fun for families spending time together, the new school term can come as a relief for many parents, after a summer of juggling work with their childcare responsibilities.

Childcare is a big expense that too many families struggle with – and not just during the summer holidays. So much so that childcare costs can stop some parents from returning to careers that matter to them, or make them think twice about working as many hours as they would like.

This government is doing something about that, with our 30 hours free childcare offer. It’s about supporting working families by making childcare affordable.

Working parents of three and four year olds who earn less than £100,000 a year are eligible, and over 200,000 families have already received their codes to take up the offer this term.

This new childcare policy should save around £5,000 per year for each child - and that’s on top of the support already available to many families through Tax-Free Childcare, which is available to around two million families in the UK. Parents can open an online childcare account and pay into this directly, meaning for every £8 you pay in, the government will add an extra £2 – up to £2,000 per year for each child under 12 years old.

All of this is a huge boost to families’ finances and takes away some of the barriers that might have been preventing parents from working. That’s certainly been the case for many of the 15,000 families that benefitted from the offer when we tested it out early in a number of areas across the country.

An independent survey of parents in eight of the councils that started the offer last September found four in five families said their finances improved.

Kurstie, a working parent in Staffordshire was one of the parents who benefitted from the offer early. She told us that having access to 30 hours of free childcare was the “greatest gift a working parent can be given”.

All this is backed up by our record investment of £6 billion per year in childcare, which includes an extra £1 billion per year by 2020 to deliver the free offers. This has meant more money for local authorities to pass on nurseries, childminders and other providers that will be delivering this offer.

For me as Education Secretary, this isn’t just about helping families with the big costs of childcare. We now know that high-quality childcare helps our children to develop, play and learn, helping them to go further at school. The good news is that nine in ten early years providers are now rated as good or outstanding, so parents can feel confident that their children will be getting a great education. And that ultimately will be the longer term impact of the government’s new policy on childcare – young people getting a better start in life.

Information for parents
More than 200,000 codes have already been issued to families and around 2,000 parents are successfully applying through the website every day. We know that there have been technical issues for some parents and we want to reassure them that no one should lose out because of this. Anyone who has experienced issues should call the childcare service helpline on 0300 123 4097. You can find out more at www.childcarechoices.gov.uk

Children and Families Minister, Robert Goodwill, will be responding to questions and comments on this post shortly.

We are one of the families that got an HMRC code and should in theory be eligible (so part of the 200,000 families supposed "good news" story set out above).

Unfortunately the reality is that we can't find a nursery that will offer the full 30 hours, though luckily our child's private Nursery is continuing to offer the 15 universal hours (which is and always has been a subsidy, discount of about 30% on total fees, rather than anything like the full amount- we still pay £430 per month for three full days, Greater London area).

We tried using a school nursery for 15 hours and nursery for 15 hours. Unfortunately the school (while saying they were in theory happy to apply to provide their 15 as a "top up" to the full 30 alongside our current provider's 15) couldn't register in time. It would have been really hard making it work with two providers anyway - as would have involved breaking the working day to transport child from one setting to another!

So nothing has really changed for us. The policy doesn't seem to be properly funded as so many nurseries and childminders can't afford to make it work. So actually finding a provider doesn't seem possible in many cases. If you can (e.g. the 15 hours we managed to get in a private nursery) in reality it is a subsidy rather than properly funded hours. Providers seem confused about how to administer it, especially if there is more than one of them involved (surely this would have to be the case if using a state school nursery). There are practical arrangements if you do use a school nursery and an alternative provider.

It is just too complex and I think it's a huge misnomer to say it is 30 "free" hours! It would be better and simpler to subsidise parents directly, perhaps childcare vouchers that could only be used for childcare purposes. It just makes me really cross that there is a headline that supposedly working parents can now access 30 hours for free, when in most cases (ours, but friends as well) it is either actually just a slight discount on fees, is practically unworkable (problems with registration), or isn't affordable to providers so they are taking a hit, when it's hardly a well paid industry in the first place.

I appreciate the discount we do get on fees ("universal 15 hours"), and my husband and I are both in workplace childcare voucher schemes which provide tax relief. So it isn't all bad. But we are certainly no better off this September than we were this time last year, in fact slightly worse off as fees have gone up, and definitely feeling more stressed and confused in trying to access the 30 hours and then failing.

@sortingmyselfoutslowly If the nursery can't get your code to show as eligible it would suggest to me that they are typing in something wrong.
Please check they are using the correct code, NI number and have your child's date of birth correct. One wrong digit and it won't work.
Hope you get it sorted.

This policy is all fur coat and no knickers.

I don't have a child of the qualifying age, but looking round local nursery websites show how underfunded it is. They've all either closed down or increased their prices for 0-2's dramatically. It's very helpful for those of us needing baby provision.

This policy is not free hours but funded. It is woefully underfunded and there is a very real risk of childcare providers closing down which will worsen the shortage that we already have.

Please listen to what childcare providers have been saying for months: this policy is not working and needs revamping urgently.

possibly not the grateful responses that they were expecting. I don't think Justine Greening will be back

I'm a childminder and I've taken the decision not to offer the 30hrs as it pays less than my hourly rate and I don't want to subsidise an ill thought out policy that has managed to completely mess up the childcare industry (and considering Tory policy on welfare I really feel sorry for those childcare workers who are now on the dole!)

Why couldn't the money instead be used to pay qualifying families a childcare allowance which they could spend with registered/approved providers as they see fit?

I'm a childminder, they will be paying me £1.54 less than my hourly rate. I hardly make a profit as it is, if I offered the 30 hours to all of my clients I would have to close as my business wouldn't be viable!

Tax relief woudl have worked better and been simpler. I have wanted thaqt for over 30 y ears. Even this new thing isn'g available to my grandchild because of the income limit. Even if it were it would not be available at any decent nursery in a big city where there are jobs in the SE because the rates are too high.

Perhaps just concentrate on much lower flat taxes and no special complications and concessions or else just give straight tax relief for those who pay. Also age 3 is not preserving careers. I was back at work in weeks (not even months) so those 3 years before the 30 "free" hours kick in are when women lose their careers or men do if men stay home.

Why should the tax payer be subsidising child-rearing costs of the middle classes? It's ludicrous that people with a household income of eg 90K receive 30 free hours per eligible child. The people it would make a difference to are at the lower end of the wage scale - why not extend it to enable more, lower paid parents back into the workplace after mat leave?

The policy is also illogical. If the point is to encourage people back to work then I assume there is a plan to create lots of term time only, flexible jobs with hours that fit into the preschool day ?!

Many, many settings around the country will simply cease to offer the 30 hours once they've trialled it for a year. The amount being offered by the Government is less than the hourly rate most settings need to break even. They are therefore losing money on every single child who takes up the 30 hour funding. It will simply not be sustainable.

Far better to offer parents up to £5,000 towards the nursery care of their choice. It would then be up to parents how they use this, and allow settings (including childminders) to charge their normal rates, with parents making up any shortfall.

Also, I totally disagree with the upper limit ie. parents need to be earning less than £100,000 per year each (in a 2 parent family). Do parents earning £199,999.00 per year really need a 5K contribution to nursery? The upper limit should be £50,000.00 per person.

Justine,
My daughter's nursery placement receives £4 per hour from the local authority. They then "credit" the 15 funded hours at a rate of £3.76 to our account.

They then proceed to calculate the monthly fee by simply deducting this credit from the standard day rate. The day rate for non funded places is also £1 lower than for funded places.

In short they charge a top up, and also create an extra charge over and above their standard placements.

This results in funding from the Local Authority being passed to the nursery at a rate of £190 per month, and by fudging these figures the provider reduces the monthly bill to parents by £25.

They do not itemize charges in any way at all. There are only two items on the

September fees = £446.33
Wraparound funding 11 hours = £

That's it.

When questioned the director of this large provider stated:

"You are on wraparound childcare I do not have to tell you any more itemisation other than that, as I've said this is audited and approved by 10 different LA's, are they all getting it wrong too?"

My question to you would be, is there any wonder that smaller organisations and individual child minders are facing financial hardship or closure trying to comply with this legislation whilst larger providers are allowed to blatantly flout the rules, pocket some of the funding for themselves and have parents pick up the bill?

My next step is to involve local MP's who's constituencies this organisation operates within. However if you would like to head this off at the pass and prevent it being raised in parliament on both sides of the house, I am more than welcome for you to contact me if you wish to look into this case.

From another point of view I'd love to know the effect the 30 hours is having on traditional users of school nurseries. Swathes of parents send their children to school nurseries, accessing 5 sessions a week either morning or afternoon knowing this is a good way of socialising their children prior to starting reception. This has never suited commuting parents who utilise day nurseries and childminders until school proper starts. Now, by offering 30 hours, not only has the amount of children who can access the nursery decreased (potentially 30 full-timers as opposed to 60 part-timers), the day nursery users are now in the mix making it highly unlikely for the majority of children applying for a place to actually get one. The initiative is great for saving parents £5,000 a year but not so for those who now can't access the school nursery. Where do the other 30+ go to get their free 15 hours?

Right now I've just tried my application. Lo and behold......

So I've had to recall a long string of digits for my user ID. Then a long password (password reset so it's in two parts). Then an access code is sent to my mobile. Then I have to get my passport and confirm details from that. And only then does the technical problems page flash up!!!!! I've done this twice now.

I work in an outstanding Montessori nursery. It costs us £5 per hour per child to run and we just about break even with 15 hours funded. We can't offer 30 hours because we cannot run on £3.91 per child per hour. We pride ourselves on offering the highest level of care, something all children deserve and we can't do that with a huge deficit. Staff wages cannot be dropped, we are already on minimum wage despite almost all of us being level 6, degree level. We would close within months. The whole scheme is severely underfunded and badly thought out. We have been made the bad guys and are the ones getting the flack from parents.

Sorry, hit post too soon!

Yes it saves parents £5k a year, but at what cost? We are one of the most underfunded, undervalued industries, yet we are literally forming the foundations of these children's entire lives. Please think before you claim your hours, whether you really need them.

I don't qualify for this as my son just started school this week.

It's a total mess for those who do qualify though as per previous posts.

What I want to know is why is this from 3? If you want people to go to work you need to help from at least 12 months so people can afford to return to work in the first place. I went from full time to 3 days as it wasn't worth it with the costs but many can't afford to return at all.

Help from 12 months and pay the parents direct so they can top up with provider. Don't penalise single parents! And why 100k each parent?! That's ridiculous. Help those on low-middle income up to, say, 80k joint which is still loads!

You'll need your hard hat here, Justine. Sort your house out.

Well its costing me £780 per year to subsidise the 15 hours my youngest is entitled too. It isn't much to most here but it means we are having to pull him out.

The original thing behind the 15 hours I thought was to help dc from more deprived background get ready for school but available for all so as to avoid any stigma. With more and more providers closing and other people like myself pulling out their children due to rising costs we seem to be going backwards here

The sad thing is this is all about money, as is the Tory way. Early years and education should be about child development and building the foundation for our children. When you talk about this policy it is all about money and savings - nothing about any other benefits to the child and families or increase in quality of care.

I have been trying for 3 months to open a tax free childcare account for my not yet two year old. Despite numerous calls to the helpline nobody ever calls back as promised!
I've managed to set up an account for my son yet the service is telling me they don't recognise me or my NI number. Ridiculous!!!

Coo-we! Justine! You coming back to answer these questions?

No?

I'm shocked.

Yes I am waiting for Robert Goodwill to respond 'shortly'.

There is a Facebook group with more than 17000 childcarers as members called Champagne Nurseries - Lemonade Funding. It is full of childminders and nursery owners tearing their hair out trying to work out how to keep their businesses afloat when they're expected to subsidise the government in providing this service to people far better off than them for considerably less than market rates.

This policy is a good idea but is underfunded and incredibly badly executed. The pilot was used not to identify problems and rectify them, but to identify the workarounds nurseries in pilot areas used to make the unworkable policy workable and explicitly ban them. Bonkers.