National Day Nurseries Association (NDNA) says evaluating how the early implementers work in practice is crucial to the sustainability and long-term success of funded 30 childcare hours.
As the Childcare Bill passed in the Commons last night, Childcare Minister Sam Gyimah told the Commons said there would be a comprehensive package of funding reforms and that details of the pilot schemes will be announced shortly.
NDNA’s Chief Executive Purnima Tanuku OBE said: “We welcome the Minister’s comments on reforming childcare funding in order to get the right amount of funding to the nursery frontline – but it is absolutely vital that these changes do happen so that nurseries can offer 30 hours without incurring a huge financial penalty.
“We are due to hear soon about the early implementers that will be piloting the 30 hours expansion in September. We need to see how this scheme can work so that nurseries can participate without pushing up fees for parents or facing bankruptcy.
“Chronic low funding rates mean that nurseries have historically subsidised 15 hour free places – this simply won’t be viable when it increases to 30 hours.”
She added: “We recognise that this initiative will be beneficial to working families and the sector is keen to offer parents this support if it is made to work, but the key issue as highlighted in Parliaments’ debates is sustainability.
“Nurseries must be able to balance their books when offering more funded hours. For most nurseries, funding for free hours does not cover the cost of delivering this high-quality care. The National Living Wage, to be implemented on 1 April, will push up pay rolls by an average of 10% with no increase in funding to cover this additional cost.”
Under the Childcare Act, three and four-year-olds of parents earning under £100,000 per year and working more than 16 hours per week, will be entitled to 30 hours’ free childcare per week during termtime.