Childcare Scheme may not be what you think

If you ask any working parent what their biggest expense is after their rent or mortgage, most will tell you it is the cost of childcare. Here in the UK, childcare costs have risen on average by just under 33% in the last decade for a two-year old child; and parents are struggling to meet the cost, even with the provision of various childcare schemes.

In fact, many childcare providers have stated that the introduction of a variety of government schemes have actually had a detrimental impact on their business. Many say that the £4.98 paid by the government per hour is not covering the full cost of delivering the childcare places. This has resulted in many parents being asked to pay additional fees.

Increased Costs for Parents

New research has shown that since taking up the government’s 30 hours free childcare scheme, more than half of parents have been asked to pay extra fees by their childcare provider.

Furthermore, more than a third of childcare providers are planning to increase non-funded hours parent fees in the coming year. The report from the Pre-school Learning Alliance found that a fifth will also be introducing additional charges for parents.

Many childcare providers have reported that they are worried they may face closure in the coming year due to a lack of funding. Sue Shuttleworth, who works as a supervisor at St. Mary’s pre-school in Sevenoaks, Kent, admitted that they had to increase fees for parents. She said, “We have had to increase our hourly rates for all parents, and fees for two-year-olds are now higher than three- and four-year-olds – the first time we have ever had to do this.”

She added, “Parents provide a packed lunch and food for snack time. This is just keeping us sustainable at the moment, but we don’t know how long this will last as the minimum wage and pension payments increase. The 30 hours is creating a two-tier system where only those who can afford it will be able to access early years education and those from more deprived backgrounds will not.”

Are Parents Really Getting ‘Free’ Childcare?

The Government promised ‘free’ childcare for working parents, but many people now fear that the scheme is just not working. As mentioned above, parents are being charged additional costs as childcare providers struggle to manage. According to Pre-school Learning Alliance chief executive Neil Leitch, “The fact is that even those providers who are technically managing to make the 30 hours work are often only able to do so by introducing or increasing additional fees and charges. Is this what the government meant when they promised parents 30 hours of ‘free childcare’?”

He went on to say, “And while better parents may be able to shoulder these unexpected costs in the short-term, those on the lower end of the income scale – the families that the government claims to be so committed to supporting – are the ones who are likely to suffer as a result. How many increasingly expensive ‘additional costs’ will providers be forced to introduce, how many providers will be forced to close their doors, before government admits there’s a problem?”

Defending Free Childcare

Although there have been some complaints about how sustainable the Government’s ‘free’ childcare scheme is, they are resolutely defending its effectiveness, with the Minister for Children and Families, Nadhim Zahawi, saying that thousands of parents are ‘saving up to £5,000 per year on their childcare bills’.

She also said, “We are spending more than any other government on childcare support, with £1 billion extra funding a year to deliver all of this government’s free childcare offers. We continue to monitor delivery costs and we have commissioned new research to provide further information on the costs around childcare.”

Nevertheless, although many parents are benefitting from the scheme, a huge number of childcare providers are not and many face closures due to underfunding. Mr Leitch said, “It’s a great thing for the parents. It is not a great thing for the industry, in fact we’re seeing nurseries close specifically because of the introduction of this 30 hours policy. For the thing to be a success it has to be balanced. It won’t be a great offer long term if providers are going by the wayside.”