An All-Party Parliamentary Group is calling on the government to tackle a £662 million funding gap in early years education.
In its report, Steps to Sustainability, the APPG says that recent policy decisions are increasing financial strain on childcare providers. In particular it highlights the government’s flagship policy to provide 30 hours of free childcare to three and four-year olds and suggests there is an approximate funding shortfall of 20% an hour for every child.
Childcare providers across the UK are facing rising outgoings, from increases to business rates to higher staffing costs following statutory increases to pension contributions, the national minimum wage and the introduction of the national living wage. However government funding has not risen enough to help providers cope with rising costs.
Low pay also means that many childcare providers are struggling to hold on to staff as they seek better paid work in other sectors.
As such the APPG is calling on the government to tackle the crisis in its forthcoming Spending Review.
Tulip Siddiq MP, Chair of the All-Party Parliamentary Group for Childcare and Early Education, says:
“We know that the early years are hugely important to a child’s physical and mental development and future life chances. However, there is a significant body of evidence to demonstrate that childcare providers are battling to achieve and maintain financial sustainability, and that government policies are a major cause of this challenge.
“With the Spending Review just around the corner, and a new Prime Minister soon to enter Downing Street, this report is being published at a critical time. We urge the government to take on board our recommendations and provide the urgent funding and support needed to successfully, and sustainably, deliver its childcare policies”.
The report has also been welcomed by childcare providers but Neil Leitch, chief executive of the Early Years Alliance, says it must not be ignored: “This report and its recommendations are the result of a year of hard and serious work by the APPG to understand the early years funding crisis.
“It deserves a considered response. It simply will not be good enough for ministers to respond by trotting out lines about record spending, happy parents, or a lack of will from providers to make things work. It’s time for them to accept that underfunding is causing a crisis of sustainability in the sector that’s putting downward pressure on quality and forcing up parent fees.
“We know already the phrases ministers use to defend their record but no amount of polish can gloss over the dent in their argument. The simple fact is there’s a huge and growing shortfall in early years funding and it’s leaving many providers, especially those in disadvantaged areas, with little option but to close.”
“It’s beyond time ministers got a grip of this situation and recognise that only government can intervene to safeguard the long-term sustainability of the sector by increasing fees and committing to an annual review”.