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Childcare providers face sharp rise in costs

Costs to childcare providers have risen sharply over the last three years, a government-funded study suggests.

The Early Years Providers Cost Study was commissioned to help understand how "recent policy changes and other drivers of cost have affected the delivery of early years education and childcare".

The costs increase - 13 per cent across all types of provider - cannot be accounted for by reference alone to inflation, minimum wage and pension costs, which increased by 10 per cent over the same period.

In May last year, independent research by Ceeda warned that providers faced a funding shortfall of more than £500m. 

Following its introduction of a national funding formula for the 30 hours entitlement for three- and four-year-olds in 2017, the government froze or cut the rate for 84 per cent of local authorities in 2018/19.

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