A new childcare policy in England is providing 30 hours a week of free support to the families of more than 200,000 three- and four-year-olds. The extra help, given to children of working parents for 38 weeks a year, gives a great deal more flexibility to families and is expected to save them around £5,000 ($6,800) per year per child. However, a number of education charities and childcare providers argue the policy is underfunded, forcing providers to rely on supplementary charges and raising concerns about its sustainability.
Results & Impact
In autumn 2017, an estimated 202,783 three- and four-year-olds took advantage of 30 hours of free childcare. The number of children is projected to rise to over 300,000 from January 2018. It’s expected around 390,000 families across the country are eligible. An independent evaluation found that 84% of parents reported improved finances as a result of the policy and 78% reported greater flexibility in their working lives. 23% of mothers and 9% of fathers reported that the policy allowed them to increase their working hours. The universal offering of 15 free hours has been taken up by 94% of the parents of three-year-olds and 96% of those of four-year-olds.
Department for Education, England's 152 local education authorities, Childcare Works, childcare providers
The Department for Education provides funding to all 152 local education authorities based on the “early years national funding formula” (EYNFF), weighted according to the area’s needs. Local authorities then work with childcare providers in their region to create places, and pay them per child per hour. 570 free hours per year are provided for free universally to the parents of three- and four-year-olds, with an additional 570 hours available for children with parents who earn at least the National Minimum Wage or Living Wage (about £7.50 per hour, or $10.20) for 16 hours a week, and each earns less than £100,000 ($136,000) per year. Parents apply online and are sent eligibility codes which are validated by providers, who are paid by the authority.
Parents and children
Cost & Value
The UK government is providing an extra £1 billion ($1.36 billion) per year by 2020 to deliver the free entitlements
Running since September 2017, with an early implementation beginning one year before
Though it’s been rolled out very successfully in some regions, the policy has been heavily criticised for its levels of funding. Educational charities such as the Pre-School Learning Alliance argue that many providers are struggling to offer 30 hours at the rate they receive, while costs are increasing due to inflation and the growing minimum wage. The new funding formula has tended to particularly disadvantage nursery schools, whose childcare tends to be more expensive than private and voluntary organisations. Meanwhile, parents who are offered employment need to wait a school term before accessing the free childcare, which is a problem the Department for Education is currently reviewing.
A new policy in England is giving working families 30 hours of free childcare each week, which participating parents say allows them to work more hours and save money.
Launched in September 2017, an estimated 202,783 children benefited during the autumn term, with over 300,000 signed up for January 2018. The extra help is expected to save families around £5,000 ($6,800) per year per child, and can be taken over 38 weeks a year.
“It takes the pressure off our finances so we’re able to do more with our families”
The impact on working families has been significant. An independent evaluation of the early implementation, which began in September 2016 with eight councils, found that 84% of parents reported improved finances as a result of the policy, and 78% reported greater flexibility in their working lives. Meanwhile, 23% of mothers and 9% of fathers said they had increased their working hours as a result.
“Parents have said ‘it takes the pressure off our finances so we’re able to do more with our families,’” said Jo Fisher, Childcare Sufficiency and Organisational Development Team Manager at Leicestershire County Council, which participated in the early implementation. “It’s also given them more flexibility in the hours they can take.”
The policy is an extension of the pre-existing 15 hours of free childcare which has been offered for all three- and four-year-olds since 2010. To get the extra 15 hours, both parents need to be working and earn less than £100,000 ($136,000).
An extra £1 billion ($1.36 billion) per year by 2020 is being provided to deliver the free entitlements, and around 390,000 families across the country are thought to be eligible for the full 30 hours.
“30 hours has been more popular than we anticipated”
“Our universal offer, 15 hours for all three- and four-year-olds, has amazing take up: 93% for three-year-olds, 96% for four-year-olds,” said Michelle Dyson, Director of Early Years and Childcare at the Department for Education. “30 hours has been more popular than we anticipated.”
Local authorities are responsible for implementation, with the support of the Department and an implementation partner, Childcare Works. “Working with local authorities is absolutely critical,” said Dyson. “They know their populations much better than we do.”
Funding is sent to England’s 152 local education authorities based on the new “early years national funding formula” (EYNFF), weighted according to each area’s needs. Local authorities then work with local childcare providers to create places for the children. Parents apply online and are sent eligibility codes which are validated by providers, who are then paid by the authority.
“Those children attending the 30 hours, their attainment and progress was higher compared to children attending the 15,” said Jayne Challiner, Early Years Service Manager at Wigan Council, where 100% of “maintained” schools (overseen by the local authority), nursery schools and private and voluntary providers offer 30 hours.
Wigan was one of the authorities which took part in the early implementation, and they began by working closely with two clusters of providers around two nursery schools.
“We brought all the providers together, working in partnership as a cluster,” said Angela Holland, Early Years Operational Support Manager at Wigan Council. “They did cost analysis, looked at strengths and how they can support each other, problem solving, what were the main barriers to delivering 30 hours, what were the different models they could consider.”
One challenge Holland has faced is that “if a parent is offered employment, they can only access the 30 hours after they’ve received a ‘yes’ decision,” she said. This means they need to wait a school term to access the free childcare.
“One provider put it to me: can’t afford to offer it, can’t afford not to offer it.”
Particularly for early implementers like Wigan, 30 hours has been rolled out very successfully. However, the policy has come under a great deal of criticism for its levels of funding. Organisations including the Pre-School Learning Alliance (PLA) argue that it’s not covering childcare providers’ costs, but they still feel obliged to offer 30 hours in order to stay in business.
“Market pressures push providers who don’t feel it’s necessarily a sustainable offer into giving it a go,” said Shannon Hawthorne, the PLA’s Press and Public Affairs Director. “One provider put it to me: ‘can’t afford to offer it, can’t afford not to offer it.’”
The new funding formula has been particularly difficult for nurseries which “saw quite a loss in their hourly rate” in Leicestershire, said Fisher, and tend to be more expensive to run than private and voluntary providers.
The rates were set by the government’s in-depth cost of childcare review in 2015. “Having spoken to the researcher, her view is that there’s just a vast range of how efficient people are: there’s a big spectrum,” Dyson explained. “The acid test for us was would they do it or would they not, and the vast majority of providers are.”
The 30 hours of free childcare are not meant to cover additional costs, which means many providers rely on supplementary charges to make up for a shortfall. “The actual entitlement is for childcare, so you can charge for your lunches, for instance, you can charge for additional activities and services,” said Fisher. “You can charge either side of your 30 hours, and that’s how they come to break even.”
“There was not a great understanding across the sector about how much it cost to offer a place,” said Challiner. Local authorities are on hand to offer business support to help providers make ends meet, such as looking into their business models, ratios between staff and children, or opportunities to partner with other providers.
With pressures such as inflation and increasing minimum wages – which have run ahead of budgets in some local authorities in recent years – providers need to ensure they are as efficient as possible, especially if their funding remains the same. “They have got to make these businesses sustainable,” said Holland. “So as much as we’re positive now, we do need to closely monitor the situation.”
(Picture credit: Flickr/Donnie Ray Jones, Flickr/Anna Pruzhevskaya, Flickr/Matt Molinari)