Childminders happier over funding rate than nurseries

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Despite many early years settings remaining concerned in the wake of the Department for Education’s publication of the new Early Years National Funding Formula, there are indications that childminders may be feeling more upbeat.

Research carried out by charity PACEY has suggested that the newly introduced floor rate is close to the fees that childminders currently charge. And – whilst nurseries will feel the impact of rising business costs – childminders tend to have much lower overheads.

The Government’s decision to introduce a new minimum rate of £4.30 means that local authorities have the scope to pay providers an average funding rate of at least £4 per hour, for those providers offering the full 30 hours from September 2017.

Both the NDNA and Pre-school Learning Alliance have welcomed more funding, but say it does not go far enough – despite an extra £30m being found in the DfE’s budget to support this new minimum rate.

Liz Bayram, Chief Executive of PACEY, said that childminders should see the 30-hour offer as an opportunity:

“The commitment for childminders to be paid monthly and to be able to charge parents for discretionary consumables or additional services will make a big difference to whether childminders feel able to offer funded hours.

“And the fact that the Government allows parents to split their funding across two providers means many childminders could benefit from partnering with other providers.”

A survey of 1,700 childminders carried out earlier this year by PACEY revealed that more than two-thirds charged £4.50 or under an hour; for example, 27% charged £3.50-£4 and 24% charged £4-£4.50.

Ms Bayram added, “From PACEY’s own research on current childminders’ fees, we know that the £4.09 per hour floor rate [from 2018] is actually likely to be the same as, or very close to, the fee many childminders currently charge. Add to this one or two of the supplements, for example the quality supplement at, say, a further 40p per hour, and the additional cost of consumables, and 30 hours starts to become a more attractive offering – and more in line with market rates.”

Neil Leitch, Chief Executive of the Pre-School Learning Alliance, said:

“We are still in a situation where the early years funding rates that local councils will receive next year will remain stagnant until 2020, while business costs will continue to rise. This is not sustainable and must be addressed if the Government is to ensure the sector can survive.”

He added, “While increased funding is undoubtedly welcome, it is important not to confuse ‘more money’ with ‘enough money’.”

To add to the concerns of early years providers and sector organisations – a debate in the House of Lords last week revealed that the rate for early years funding will not be reviewed annually.

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2 thoughts on “Childminders happier over funding rate than nurseries

  • December 20, 2016 at 9:01 am
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    Your article comment that ‘at least £4 an hour will be passed on to providers’ is sadly incorrect. We have just received our breakdown from North Somerset Council which shows that we will receive £3.85 an hour – an increase of a whopping 13p (3%) ! Multiply the figure by the number of “free” hours we will provide and the result is £ thousands in a year.
    It raises the question are the government and councils really committed to first class childcare or more concerned with preserving their own jobs.
    I fear for the future of independent small nurseries.

    Reply
    • December 20, 2016 at 10:14 am
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      It seems senseless that if authorities have scope to pay providers an average funding rate of at least £4 per hour that this wouldn’t be passed on. This is a very worrying time for the sector indeed, especially with many providers closing ahead of the introduction of the 30 ‘free’ hours due to overwhelming financial pressure. Let’s hope the new year brings some better news.

      Reply

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