Spending Review: 15-hour free entitlement will continue


Childcare spending reviewThe Chancellor George Osborne announced that funding for the 15-hour free entitlement for all three and four year olds will continue, during his speech on the Government’s Comprehensive Spending Review today.

The Chancellor revealed that further support will be given for the early years of our children, with additional attention towards disadvantaged two year olds.

“The increased entitlement to 15 hours a week free education for all three and four year olds introduced under this government will continue.”

“Sure Start services will be protected in cash terms, and the programme will be refocused on its original purpose.”

“And we will help them further by introducing for the first time 15 free hours of early education and care for all disadvantaged two year olds.”

“So these children have a chance in life and are ready, like the rest of their class mates, for school.”

Low-income families will receive less financial support from tax credits to help pay for childcare.

However, although tax credits would be frozen, Mr Osborne said ‘the childcare element of the working tax credit will return to the 70 per cent level.’

[poll id=”3″]“We will change the Working Tax Credit eligibility rules so that couples with children must work 24 hours per week between them.”

“And we will return the childcare element of the Working Tax Credit to its previous 70% level.”

“We want to ensure that low income families with children are protected from the adverse effect from these essential savings.”

“Because this Government is committed to ending child poverty.”

Spending on education will also rise in real terms every year, from £35billion to £39 billion the following year.

Lower-priority programmes like Train to Gain will be abolished.

Adult learners and employers will have to contribute more to further education, with the introduction of the largest ever financial investment in adult apprenticeships.

There’s an increase of over 50% on the previous government, helping 75,000 new apprentices a year by the end of the Spending Review period.

Overall, the Department for Education will be required to find resource savings of only 1% a year.

Is the spending review better/worse than you expected? What implications do you think the change in tax credits will have on the affordability of childcare? Leave your comments below to join the discussion!


22 thoughts on “Spending Review: 15-hour free entitlement will continue

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  • October 29, 2010 at 8:01 pm

    We will only be receiving £3.20 approximately in our area and many businesses will be going out of business because it is so low. If i put my fees up to cover the loss parents can’t afford it so take less hours we are in a no win situation.

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  • October 27, 2010 at 4:42 pm

    Reducing the amount of child tax credit support from 80% to 70% will have a huge effect on most of the families withing our setting. As a registered charity (not for profit organisation) in a deprived area we strive to keep fees at a affordable rate, the reduction in tax credit support will have a massive impact on the parents who are mostly in low paid jobs.

    It is crucial if settings are to survive that the government change the current system and pay all credits directly to the provider.The current loop holes leave room for fraud on a very wide scale, changing the way it is paid would enable us to continue offering these services and save the government huge amounts of money.

    With so many providers voicing the same concerns is anyone going to listen and act?

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  • October 25, 2010 at 6:18 pm

    Lets all be clear once and for all. What has all the lobbying, letter writing, NDNA input, meetings and campaigning done for us since the first code of practice was issued in 2006? NOTHING. I have all but given up with this fight for what seems legally wrong to me. How can anyone tell me as a private business what I can charge to provide my services to my customers. I am rated Outstanding by Ofsted and am expected to charge half of my hourly rate. This cannot go on. IF ALL NURSERY PROVIDERS WITHDRAW NOW what will the government do then!!

  • October 23, 2010 at 10:00 am

    Lots of respondants ask the question ‘Why doesn’t someone stand up for us? I think NDNA are supposed to be doing that but they appear at present to be out of tune with the majority of their members. Everyone seems to be asking the question ‘Why aren’t we able to charge top-ups?’ I was interested in the response from Jo Luke who wrote that her MP had commented that she might as well charge a top up as who was going to police the system. My question is, Why don’t we all just charge top ups regardless? If every private nursery decided to unite and charge top ups the government would have to capitulate, or throw us all out of the scheme, which of course would mean that they were unable to honour their pledges to the electorate. Why not? we could.

  • October 22, 2010 at 6:32 pm

    Here in Bristol many of the childminders have opted out of the free child care situation by “evicting” the children at three. The parents then, seem to think that they can easily obtain care in their local day nursery, most of the time the places are not available, because we take under threes who stay with us for the whole of the time, before going to school.
    However, this year I have had a woman who demanded what she described as her entitlement and claimed the Government had said she should have choice and it was her choice to use my establishment. I now wonder if the government will expect us to keep places vacant for these children too!!!!!?????.

  • October 22, 2010 at 4:17 pm

    Its all well and good they will still get the tax credits for help with childcare. The problem is it goes straight into their pocket and often not for payment for nursery fees. The payment should come directly to us at the nursery like the old voucher system. This would ensure it came to us and not the parents who are using it for whatever.
    This would prevent them running up bills, then doing a runner leaving us further out of pocket

    • November 15, 2010 at 11:56 am

      hi i agree its about time the government paid the provider direct and there would be less fraud. i have had hmrc contact me regarding parents of children that have left my nursery and still claming working tax child care costs saying the kids are still at my nursery. also we would get the money for a servic we provide instead o fthe parents using this an not paying the nursery, this is happening all the time .

      it would stop faud and cut down on cats ive also had prents doing one day aty nursery and claiming for four days from them.. they pay the provider direct in scotland so why not here. come on government wake up to thebenefits ofpaying the nursery direct

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  • October 21, 2010 at 11:13 am

    So many things come to mind……. I have read all of the comments and many more over the past years (and every single one is right)…….

    Alas no one in the Goverment is intrested…. how can we be heard and listened too ?

    A majority of parents are unaware that we fund the top up – in losses (this has an impact on staffing/training/supplies and most of all to the children themselves)

    There are other questions to be asked –

    Why are parents able to to calculate the working families tax credit to include the time (15hours)get paid for it – then we cant invoice for the top ups ?

    Why do the parents get the money ? they pay everything from mortgage, car repairs etc – i have heard every story possible – if the money was placed directly to the provider or onto a card that linked with the parent/provider…..then this might help the situation.

    And it goes on – at the cost of the providers…….

    Please can someone stand up for us……its about time

  • October 21, 2010 at 9:45 am

    I also own a small private day nursery. With government dictating to us how much we pay staff and Ofsted dictating how many staff we have, and then insisting we have highly qaulified staff, all of which I agree with, how are we then supposed to maintain all of these high outgoings with the EEF paid at just £3.71 per hour?

    I have even invited my local MP into my setting to try and explain but she quite frankly didn’t have a clue! And then promptly asked me who was going to police it so not to worry and go ahead and charge!!!!

    It simply doesn’t add up and I agree that many settings will be forced to pull out of offering funded places therefore leaving many children without any form of nursery education.

    We don’t want to take anything away from parents we just want to be able to charge the top ups to maintain the high quality provision we provide. The government need to get themselves into the real world.

    • October 21, 2010 at 12:48 pm

      ‘who was going to police it so not to worry and go ahead and charge!!!!’

      Well that’s rich – coming from an MP – no doubt the same philosophy was applied to their expenses affair! Mind, they all got caught out – not that many of them seem to have suffered much. You can bet your life, if we did as the MP seems to be suggesting, we would get caught out – I can just imagine the scenario .. a family who do not want to pay the ‘top-up’ if it is charged them would know their ‘rights’ and ‘take us to the cleaners’ and where would the local MP support be then? We all stand alone on this one – the government are not interested in the PVI sector as we are quietly carrying the burden of all this; they should be interested in us, but they are not – ALL of us need to stand up and be counted on this one. This MP needs reporting if you ask me …

      I am seriously considering withdrawing from the free entitlement funding altogether, I may lose some who seem to be just ‘using us’ until they can get their child into school, but the majority of our parents would not withdraw their child and go elsewhere; a minority might be affected financially, but the majority would not be.

      I wish we could all sing from the same hymn sheet, get together, agree a course of action and hit the early years department at local government level hard with our decision to withdraw from Early Years Funding. They would have a nightmare meeting their targets; in the end our voice might be heard – we need to lobby parliament as a sector, individually our voice will not be heard, collectively it will.

  • October 20, 2010 at 9:30 pm

    As a small private Pre school, I agree with all comments made and as suggested feel we should be allowed to charge for the shortfall in fees and not have to subsidise the government.

    At present small companies are struggling to keep going impacting on our own families financially.

  • October 20, 2010 at 8:08 pm

    The least the government could do would be to allow nurseries to charge a top up fee to cover their losses, especially as the hourly rate has not increased since 2009. As a private owner of a smal setting I see very few parents who really need the funding and why should I subsidise their fees? I have children of my own to think about and will suffer a double whammy if my eldest child goes to Uni – in effect I could be subsidising the parents of early years children as the Government isn’t paying me enough in funding and simultaneously propping up a a university because the Government won’t fund them either! The Government will lose many nursery places if they don’t do something about the early years funding and pay us a realistic fee to cover the cost of running a setting – £3.71 per hour is not going to achieve very much for anyone and is hardly worth the while paying it.

  • October 20, 2010 at 6:24 pm

    The (15 hr) free entitlment should be reviewed.

    There are Parents attending my Nursery who do not need that support.(it is just wasting Government money)

    It should go to families that really need it, especially as we are all supposed to cut back.

    Something else we have recently noticed, parents are only phoning up to reserve places for their child when they reach 3yrs. So who takes care of the child for the first 3yrs?

    This could have a bad effect on Nurseries and indeed on the child.

  • October 20, 2010 at 5:07 pm

    As the owner of a small chain of nurseries I am extremely disappointed that the government continues to espouse the 15 hours free entitlement without offering an increase in funding for this policy. The government doesn’t own the nursery schools in this country (85% are in the hands of the PVI sector), they don’t understand the costs involved in running a nursery school and seem very happy to see the private sector pick up the tab for their idealogy. Private owners can’t/won’t continue to subsidise nursery education and will either close or pull out of funding. This will cause a shortage of nursery places, and ensure that there is a two tier system whereby the haves attend private settings and the havenots are left with nothing.

    • October 20, 2010 at 5:39 pm

      I cannot agree more with Libby! As the owner/teacher in charge of a private nursery, I find it incredible that any government party can pat themselves on the back and boast about their offer of 15 hours of free nursery education for all 3 and 4 year olds. Do they not realise that it is only free to the parents, not the nursery owners – they are expecting the private sector to subsidise these places and the private sector does continue to do this as we want to help our parents. I am seriously thinking of dropping out of this ridiculously unfair scheme but I am hesitant to do so because I feel guilty that in doing so, the parents of our children will then have to pay even more in fees. It is a nightmare situation for the small private nursery owner – my own nursery is full with excellent inspections, a very good reputation and a very long waiting list and I believe I would continue to get customers. However, I feel extremely guilty that if I were to drop out of the scheme, the children of the rich parents would continue to benefit from our service and the less well off children would probably have to leave. This is leading to a two tier system and goes against all the things that I believe in but I will be working for nothing if the free entitlement is increased any more and, much as I love my job, I need to earn a living too. My business is my livelihood, not just a hobby to make the government look good!

    • October 20, 2010 at 6:12 pm

      quite agree with everything Libby has said, can’t believe any Government with their finger on the pulse can’t see this!

    • October 20, 2010 at 7:39 pm

      I agree with Libby, I privately own one preschool and sustainability is a real issue when my funded hourly rate is substantially less than my actual hourly running costs. Although full, with a waiting list, I run from month to month sometimes making ends meet by sacrificng my own wages. How can this be right in an OFSTED ‘outstanding’ nursery and how is the introduction of 2 year old funding going to help the situation when those are the children I rely on to help subsidise the funded children? and now I can’t retire until 66 years old the future looks even more difficult

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