At times, government support for the sector has felt like an afterthought. Ongoing financial challenges and a lack of support has forced thousands of early years providers in England to close their doors for good.
Even before the pandemic, the sector was facing long-standing financial problems: funding to ensure the provision of high-quality early education was insufficient, while the failure to recruit and retain staff was a growing cause for concern. Education Policy Institute (EPI) research for the Social Mobility Commission highlighted early years workers are underpaid, overworked and undervalued.
Funding pledges
In light of these pre- and post-pandemic challenges, it is particularly disappointing that pledges from ministers at the Comprehensive Spending Review for “additional” funding for the sector over the next few years now appears to be anything but. Sector organisations are right to feel let down over this mismatch of words and actions, and it is clear the government should have communicated its long-term funding plans more clearly.
The long list of financial problems facing the sector are unlikely to disappear any time soon under the planned funding arrangements between now and 2024/25. What’s more, looking at the more immediate term, 2022 is set to leave early years providers having to navigate an extra set of demands.
An even steeper uphill battle for providers is coming, driven by increases in the National Living Wage – up by seven per cent – and minimum wage, a rise in apprentice rates – up by 12 per cent – and wider inflation driven by energy costs. Government funding rates have failed to keep up with rising wages, which account for around three quarters of providers’ costs threatening the financial sustainability of yet more settings.
This year will be especially critical, but wage rises have also been a problem to contend with for several years. Research from the National Day Nurseries Association has shown that over the last five years, hourly rates that the government pays to local authorities for funded childcare places grew by only 3.3 per cent. Over this same five-year period, the National Living Wage had increased by 19 per cent (see graphics). This year, that gap will continue to widen.
If providers are unable to offer sufficient pay, they may find it increasingly difficult to keep hold of their staff this year. While they want to be able to recognise and reward the vital work their staff do, without an improved funding offer from government, their most qualified and experienced workers may seek employment elsewhere.
Previous EPI research has shown that the labour market for early years workers is increasingly subject to volatility, with workers likely to leave for other competing occupations. This fragility was apparent during the height of the pandemic, when survey figures showed that a high proportion of the workforce was placed on furlough.
Crucial support
The worst of the pandemic may be showing signs of abating, but for the early years sector the prospect of further settings closing, workforce instability and soaring costs lie ahead. These costs will translate into higher fees for parents – which some providers will be able to shift towards, but for others in more deprived areas, this simply won’t be an option. Given that early years providers in deprived parts of England are more dependent on funded hours, support offered by the government will be particularly crucial if they are to stay afloat.
Following the outcry from the sector over long-term funding arrangements, the government must now keep its offer under close review and be prepared to go further to prevent more settings from going under. If the early years continues to be regarded as an afterthought, it’s the most disadvantaged children that could pay the price.
FURTHER READING
-
Funding rates analysis, NDNA, November 2021
-
Covid-19 pandemic and the early years workforce, EPI, July 2021
-
Stability of the early years workforce in England, Social Mobility Commission, August 2020
