Free childcare sounds too good to be true, right? But that’s the problem - ‘free’ childcare isn’t really all it’s cracked up to be.
Though the splashy headlines make free childcare sound like a dream, in reality, there’s a very different picture behind the scenes.
What Is Free Childcare In England?
England's current government-funded childcare scheme provides eligible parents and carers access to between 15 and 30 hours of funded childcare per week.
If you’re a parent of a 3-4 year-old child or a working parent of a 2-year-old in England, you’re entitled to 15 hours of free childcare at approved settings. The 30-hour option comes in if you’re a working parent of a child aged 3-4.
Several changes have been announced recently, due to begin in April 2024. The offering will also extend to babies aged 9 months plus from September 2024.
Where Is the Problem?
The problem is a big one.
First of all, there is a HUGE demand for funded early years childcare spaces.
Great, you might think. Lots of parents are keen to prepare their kids for entering the world of school and education and get themselves back to work.
It sounds like a match made in heaven, right? A perfectly designed system where everyone’s a winner.
That’s until you find out that the Government funding only covers the hours during the 38 weeks of term time, and even then only around 70% of the true cost of nursery fees. This means that parents who need childcare all year round are having to pay for the other weeks that their child attends, and nurseries and childcare providers are left with a massive deficit in income and have to find ways to cut costs.
This unabashed shortcoming on finances puts a ton of extra pressure on staff members and nursery managers, with some individuals choosing to leave the profession altogether and many settings closing due to financial difficulties.
Additional Pressures On Nurseries
When you factor in the economic pressures affecting us all, you see how ‘free’ childcare is unsustainable for England’s childcare sector.
Not sure what we mean? Consider these financial factors…
- The national living wage increase in 2024 will take the living wage to £ 11.44 per hour. This is great for employees, but not so great for nurseries experiencing a continuous deficit.
- Pension contribution increase. Workplaces are required to put money into their employee's pension pot, and the percentage required has increased.
- Food and fuel costs. Both of these consumables have skyrocketed in cost over the past couple of years, reaching all-time highs.
- Rent increases. The rental market has also jumped up to higher figures in recent years.
Last year’s changes to the way business rates are calculated for private nurseries have seen some settings succumb to a 650% increase in their rates. Business rates are calculated based on the headcount of employees rather than size. And, unlike Wales and Scotland, English nurseries are not eligible for any rate relief.
When Free Isn’t Really Free
All of these changes to early years funding in England have forced the nurseries to rethink their business model. It is simply not possible for them to survive on funded income alone.
How do nurseries make it work, you might wonder.
Unfortunately, for many nurseries to remain operational, they’ve had to make big changes. Some have introduced restrictions on the use of funded hours in their setting. Another way settings are recouping costs is to invoice families for supplementary charges to cover things like food and other educational resources that are always in high demand.
The lack of realistic funding for free childcare means nursery fees for paying customers have been pushed up. Under constant pressure to save pennies where possible, resources are stretched beyond measure with items like toys and books not getting replaced as often. Nurseries have also had to limit outings, replacing once cherished fun days out with more economical ideas.
And the staff. Nursery teams under so much stress are burning out quickly, and the clear lack of funding is doing nothing good to help the early years sector retain and bring in talent.
How The Isle Of Man’s Funded Childcare Works
We do a lot of things differently here on the Isle of Man, and our funded childcare system is one of them.
On the Island, all parents and carers can apply for a universal credit for childcare for the year that their child turns 4 years old. This provides each family with a 1-year credit of up to £4,166 per child that can be spent on early years childcare.
This scheme has been designed to maintain the quality of funded childcare without impacting the service. It is an inarguably fairer system, providing benefits to all parties. Under the scheme, children can access a nurturing early years education, parents are afforded time to return to work and childcare providers are able to set their fees to allow for sustainability..
There are updates on the horizon which will hopefully make childcare more affordable for more parents on the Island.
Free Childcare? Think Again
Free childcare has a greater cost than many realise. As the burden of providing quality services for less money continues, more early years settings are having to close their doors for good.This creates less availability in the sector and less choice for parents.
So ultimately parents in England are finding that free childcare places are hard to come by and then they? aren’t actually free if they can actually secure a place. So beware of the headline.
The Isle of Man is proud to do things differently, and working in childcare on the island is just one of the reasons why people move here. Take a look at this blog to find out what the Isle has to offer.
