Imagine a friend invites you out for a meal at a nice restaurant you’d always wanted to try. “Leave your wallet at home,” they say confidently. “Dinner’s on me.”
You go to the restaurant, have a great meal and are presented with a bill at the end – for, let’s say, £100 in total. “Oh, sorry,” your friend says. “I’ve only got £70 on me.”
No one would blame you for being incredibly frustrated in this situation. After all, your friend insisted they would pay for the meal and for all they know, you might not have the extra £30 needed to cover the rest of the bill.
But equally, no one would expect the restaurant to accept any less than the £100 cost of the meal – after all, they provided the service they were asked for, and have to cover their costs in order to run a sustainable business.
The only person at fault in this situation is the friend who made a promise that they failed to keep.
Such is the situation with the early years. Successive governments have promised parents in England ‘free childcare’ but repeatedly failed to pay nurseries, pre-schools and childminders what it actually costs to deliver places. Parents are not at fault for expecting what they’ve been promised – but neither are providers for expecting to be paid fairly for the service they are delivering.
Despite some increases in government funding rates, particularly for younger children, over recent years, for many early years settings across the country the money they receive from the government still doesn’t cover the cost of delivering a high-quality early years place. This is particularly true for three- and four-year-olds – in fact, according to the Institute of Fiscal Studies, once rises in providers’ costs are taken into account, the current funding rate for three- and four-year-olds is worth about 15% less than it was in 2012/13.
So what does this mean for parents?
If you have a child or children at a nursery, pre-school or childminding setting, you’ll mostly likely have already experienced the cost of any non-government funded hours or sessions you’re taking up – plus charges for things like meals, snacks, nappies and trips – steadily increasing over recent years.
This isn’t because early years settings are trying to squeeze as much money out of families as they can; it’s because it’s the only way they can fill the funding gap left by government and keep their doors open.
And things are only likely to get worse this year. In April, changes to employer National Insurance contributions will place even more financial pressure on early years settings – with private and voluntary providers receiving no support from government to meet these extra costs, despite the vast majority of their income coming from government funding. The result? Fees and charges for anything not covered by government funding are likely to rise even further.
The government has claimed that it is supporting parents by tightening the rules for additional early years charges – specifically, strengthening guidance which states that any charges within the funded entitlement offers must be voluntary. This is, of course, completely reasonable in theory – but the truth is that for many settings across the country, the income they receive from additional charges is the only thing standing between them and permanent closure.
And so, while completely recognising the need to be fair and transparent to all parents, many providers are understandably worried that large proportions of families choosing to opt out of paying for optional extras could be the final nail in the coffin for their early years settings.
If the government wants to ensure that the funded entitlement places are genuinely free at the point of delivery, then it first needs to address the long-running issue of sector underfunding. Without this, all the updated guidance on charging is likely to do is put more pressure on an-already fragile sector, prompting many settings to consider limiting funded places, or opting out of some or all of the entitlement offers all together.
If that all sounds a bit of like a mess, that’s because it is. Neither parents nor providers should be paying for a promise that successive governments have chosen to make – and yet, that’s exactly what is happening.
So if you are waiting to hear from your early years settings on fees and charges for the next financial year, please be patient and bear with them. They are doing their very best to navigate their way through a near-impossible situation.
To find out how you can support the call for fairer early years funding, visit: bit.ly/EYAfairfundingMN