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Government says 'no' to early years funding increase in 2018

21-Nov-17
Article By: Melissa McAlees

Most local authorities will not see any increase to their early years funding rates next year, with some of the most deprived areas of England seeing their rates reduced.

Credit: Alena Ozerova/Shutterstock.com

The Department for Education’s (DfE) new figures on early years funding rates 2018/19 show that 70 per cent of local authorities will receive no change to the funding they receive while 14 per cent will see a reduction in their level of funding.

Among these are councils with some of the highest levels of deprivation in the country including London boroughs, Sunderland, Liverpool, Bradford and Stoke-on-Trent.

Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), would not be 'surprised' if more nurseries opted out of the 30-hour free childcare scheme due to worries over sustainability.

She said: “With inflation running at three per cent and other business costs rising, even those areas where funding has been frozen are facing a cut in real terms. This is a real threat to sustainability and shows the government has not listened to the sector.

“Although in some cases the funding rate has increased slightly, funding rates for next year will not increase for the majority of providers. Worryingly a handful will see their rates reduced, including some of the most deprived areas of England"

A total of 47 local authorities will receive the lowest possible rate of £4.30, with 22 of these areas being in the North of England, while 16 per cent will see a rise to their allocations.

Richmond-upon-Thames’ hourly rate is set to rise from £4.90 in 17/18 to £5.61 in 2018/19 – an increase of £0.71 per hour, while the London Borough of Camden will lose £0.45 per hour, with funding dropping from £8.98 in 2017/18 to £8.53 in 2018/19.

Neil Leitch, chief executive of the Pre-school Learning Alliance, says the new funding rates demonstrate why so many childcare providers are ‘worried’ about their long-term sustainability.

He said: “Despite the fact that we are seeing staff wages, rents and mortgages, insurance costs and business rates all increase, the vast majority of local authorities in England won't receive a penny more in government funding for the so-called free entitlement next year. Worse still, 14 per cent of councils will actually see a fall in funding. How can this possibly be sustainable?

"We have long warned that if funding rates don't increase in line with rising early years delivery costs, more and more nurseries, pre-schools and childminders are going to be forced out of business. The vast majority of childcare providers in this country support the idea of free childcare in theory, but they cannot be expected to deliver it if they are suffering a real-terms loss in funding year after year.”

Mr Leitch has since issued a pre-Budget call to increase childcare funding. In an open letter to Chancellor Phillip Hammond he commented: “We know the Department for Education is aware of the challenges facing the sector. Only last week, the Department announced a new ‘Delivery Support Fund’ to help tackle what it described as the ‘variety of challenges’ the sector will face as the year progresses and the demand for 30 hours increases. So the government knows that things are only going to get more difficult for providers. But the sector doesn’t need one-off limited funding pots – it needs long-term sustainable funding.”

Earlier this year, a survey conducted by the Pre-school Learning Alliance revealed that 49 per cent of childcare providers were worried that they could close as a result of the funding.

The educational charity is calling for providers and parents to join its Fair Future Funding campaign, which asks the DfE to review the current funding rates. More than 5,000 people have joined the campaign.

For more information visit: www.pre-school.org.uk/fairfuturefunding

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Darren Grindrod

05 Dec 2017 2:07 PM

"A total of 47 local authorities will receive the lowest possible rate of £4.30" are your figures correct? If this is the lowest possible rate why is funding in Rochdale for private nurseries an average of £4.00?

Reply from daynurseries.co.uk - These figures were from the Department for Education. The Pre-School Learning Alliance has a section on its site where you can check funding rates for different local authorities https://www.pre-school.org.uk/eynff/101