Local authorities receive £755m to double free childcare for two-year-olds

The Department for Education has announced it will spend £755m in 2014 to support an extension of free early years places for the most disadvantaged two-years-olds.

Free childcare entitlement will now extend from 20 per cent of two-year-olds to 40 per cent of the age group in September 2014.

Purnima Tanuku, National Day Nurseries Association chief executive responded to the announcement and said: “The announcement of a £755m funding pot for local authorities to deliver the next raft of two-year-old places must be passed on in full to the early years providers to ensure we have enough high quality places.

“Thanks to a more transparent system announced along with this funding, local authorities and childcare providers will be able to see how many two-year-olds in their catchment area are eligible for funded places.

“Ministers have recently been urging local authorities to pass on the free place funding in full and we would ask them to take notice and listen.

“NDNA’s latest nursery survey showed the rates around 50 per cent of providers were receiving for a two-year-old place was less than the amount it cost to provide the care. In order for the system to be sustainable and provide quality early education and care, funding must meet costs.”

In order to ensure all qualifying children can receive free childcare, the extra care provision will become a statutory duty for all local authorities by 1 September 2014.

Elizabeth Truss, Parliamentary Under Secretary of State for Education and Childcare announced the number of two-year-olds receiving free childcare will increase to 260,000, double the current amount being provided. An estimated 92,000 of the most disadvantaged children identified are already accessing free childcare.

Liz Bayram, chief executive at PACEY also welcomed the “announcement of the allocation of funding so that 260,000 disadvantaged two-year-olds can benefit from high quality childcare, as well as the broadening of the eligibility criteria to include children living in low income households, children living with a disability or those with Special Educational Needs (SEN)”.

However the Pre-School Learning Alliance has voiced concerns that under the new scheme, the Government will continue to pay nurseries at the national average rate of £5.09 per hour to provide the childcare for the most disadvantaged two-year-olds.

Alliance chief executive, Neil Leitch said: “We are extremely disappointed to see that there has been no increase in the average rate of funding announced last year, despite annual inflation of around three per cent and the fact that providers have repeatedly stated that this figure in no way reflects the true cost of the delivery of this provision.

“Alliance members are already facing enormous challenges. Many indicate that they are subsidising year-on-year increases in costs to enable them to continue to deliver the right kind of individual and specialist support to children in their care – particularly those with more complex needs.

“Quality provision simply cannot be provided on the cheap. It is unfair – and frankly, unfeasible – to expect providers to continue to absorb the additional costs associated with delivering quality care. If the government continues to provide an inadequate level of funding for this scheme, it is inevitable that we will continue to see a decline in the overall quality of early years provision in the long term.”

A further £5m will be spent to fund central support for the programme.