30 Hours Funding Flaw – The Providers Voice

30 Hours Funding Flaw – The Providers Voice

There are mixed feelings of anticipation and anxiousness amongst nursery providers as we approach the launch date of the 30 hours free childcare scheme with the issue of funding being the top concern among nursery providers. Research carried out by the National Day Nurseries Association (NDNA) has found that some nurseries are closing ahead of the 30 hours free funding launch because ‘free childcare coupled with wider business pressures’ is making their businesses unsustainable.

“It is time the government stopped promising parents ‘free’ childcare hours unless they are prepared to invest the money needed. This manifesto promise is in real danger of failure.”

– Purnima Tanuku, the NDNA’s chief executive

Nurseries across the country are having to consider additional charges to parents if they are to implement the 30 hours free childcare effectively and ensure the business stays afloat.

The Professional Association of Childcare and Early Years (PACEY) survey found that “60 per cent of child-minders do not charge parents for food, outings or other activities.” (Nursery World). The Department for Education (DfE) published an updated guidance in July 2017 for Local Authorities and nurseries with respect to this and has stated charges to parents are an option, but will not allow any mandatory charges.

PACEY have said that while the shortfall can be made up through funding supplements provided the Local Authority such as the early years pupil premium or for deprivation and quality, many may not qualify for the supplements (Nursery World, 2017)

Purnima Tanuku (NDNA) has also said: “For many of our members, the only way they can make the 30 funded hours work is by charging parents for meals and other additional services. This is due to inadequate hourly funding rates that our nurseries get for their three and four-year-old children. Although the guidance now states that parents can expect to pay for meals and other consumables, nurseries must offer alternatives for parents who want a low cost option. This includes allowing them to bring in packed lunches. This means these charges would still be voluntary, which is not conducive to running a business. Many settings will not allow packed lunches for a variety of good reasons, so this guidance is just not helpful and provides no flexibility nurseries need to make 30 hours work.”

It’s clear from the responses and research undertaken by NDNA that whilst a lot of providers are willing to take part there is an element of anxiousness and a level of uncertainty across the industry on whether the scheme will prove successful and if it will sustain or hinder the business.

However a pilot study carried out by the DfE found there is no reason why the 30 hours will not be a success. The Early Implement Evaluation published on 17 July 2017, found that a high number of providers from the eight Local Authority areas were able to implement the 30 hours scheme and there is no evidence to suggest that financial implications are a substantial barrier to delivery.

However the evaluation has acknowledged the difference in funding rates, a concern that was also brought by Janine Holden (Giggle & Grow Nursery), but the report states that Local Authorities will be under no obligation to offer extra support.

A Providers Point Of View…

Look4Nurseries Editor – Hajra Ravat, speaks to 3 nursery owners: Linda Ikenga of New generation Nursery (London), Bobby of Kinder Care Nursery (Birmingham) and Janine Holden of Giggle & Grow Day Nursery (Manchester) to hear their views on the matter.

Will you be looking to implement the scheme?

Linda (New Generation – London):
Yes we have no choice, we will have to see how it goes.

Bobby (Kinder Care – Birmingham):
Yes we will be giving it a go to sustain business.

Janine (Giggle & Grow – Manchester):
Yes.

Are there any challenges you think the scheme will pose or any concerns you have?

Linda (New Generation – London):
There is the unfairness of the whole program; the amount of funding offered hardly covers overheads of services.

There is the unfairness in the disparity between people who can qualify. The guidelines states parents who earn UPTO £100,000 a year can qualify and those who don’t meet the threshold cannot qualify. If anything it should be like child tax credit whereby the more you earn the less you get. It’s unfair when parents who are trying to work but not earning as much do not qualify whilst there are those who are earning up to 100,000 and able to pay for services but are still eligible to qualify for free 30 hours.

Bobby (Kinder Care – Birmingham):
The scheme itself is not clear, the nursery has tried to support parents who have checked on the eligibility calculator that says they are eligible but upon application they have been rejected and system states they are not eligible.

There is a flexibility issue with lunchtimes, they are an obstacle as they sit in between their free hours and parents will not want to include that.

The funding gap is set to increase with rising nursery costs – particularly wage inflation and business rates.

Janine (Giggle & Grow – Manchester):
There is the funding side of things and being able to cover the costs of the nursery, there is also the administration side of things where a lot of parents will not know if they are eligible or not, requiring staff to step in. Also there is the disparity of rates, with rates being set differently per area. Oldham is mainly a deprived area with a majority of low earners, yet it has been awarded one of the lowest rates of funding.

Is the funding from the government adequate enough to cover the cost of childcare per pupil? If not, how are you looking to cover the costs?

Linda (New Generation – London):
The government have not consulted and got to know properly the cost per head. Full time children will be attending 3 days a week 8am-6pm of which 2 days they will need to pay. Whilst part time parents will have to fit in 30 hours so 3 ½ days (8am-1pm or 1pm-6pm). Parents will not have the flexibility in choosing times for example a 10am-3pm slot, as the nursery cannot lose hours. The nursery needs to be able to work in a cost effective way to make the most of their available hours.

Also a lot of children will be in for the free 30 hours but if the ratio is too much, there will be too many coming through. Also if a parent loses their job there will be a grace period after which the 30 hours will not continue. There is no continuity, parents must constantly check their eligibility and if their circumstances change it is their responsibility to reapply if needed.

Bobby (Kinder Care – Birmingham):
No, we are trying and hoping to break even, luckily for us we have other branches and we are hoping that the funding does go up as it’s not enough. The government’s message is that it’s simple to implement, however it’s hard to comment until the first term after its implemented. However, Funding is low and we are worried that the government funding will not cover costs.

Janine (Giggle & Grow – Manchester):
No – The government grant has never covered costs. We as a nursery do not charge extra for lunches or to cover the costs we incur. The government has also made it difficult for parents as information is not adequate enough.

In closing, is there anything you would like to add or any comments you would like to leave with our readers?

Linda (New Generation – London):
From now till 31 August/1^st September check online and check if you are eligible as the nurseries will not do this for you. If you do not submit the application in time you will not qualify for the September intake and will have to wait till January. It is not automatic and as circumstances change parents need to constantly check if they qualify.

An advantage of this is that responsibility is taken away from nurseries and given to the parents. I believe a portal has been set up with the government and the local authorities whereby if a parents circumstances do change the nurseries are able to check and local authority notifies nurseries of which students are eligible or not.

We will not know if it works till it starts but up until then, everyone is hoping in anticipation.

Bobby (Kinder Care – Birmingham):
It’s a good idea to offer 30 hours to help parents get into work but there needs to be a funding reform to support providers to sustain their business. My message to parents is definitely try to see if they’re eligible.

Janine (Giggle & Grow – Manchester):
In general, I’m concerned for the working parents on whether they will be penalised elsewhere such as cuts in child tax credits, working tax credits, child benefits etc. as the money needs to come from somewhere.