The Labour Party has pledged to increase free childcare places for three- and four-year-olds from 15 to 25 hours a week if it wins the general election in May, and plans to pay for the expansion by raising £800m with an increase in the bank levy each year.
However, speaking at a parliamentary reception hosted by the National Day Nurseries Association (NDNA) yesterday, Gyimah said he expects the expansion to cost £1.6bn annually.
“Based on the numbers that I have seen, extending the free entitlement from the current 15 hours to 25 hours – not adjusting for inflation or any increase – could cost about £1.6bn,” he said.
“If £1.6bn is something a party is willing to commit to, it is something they should be able to fund and it’s £1.6bn that, from my basic maths, is twice the £800m bank levy that the Labour Party said is going to fund their extension of the free entitlement.
“Not only is it twice the amount, but that is the same bank levy that has been spent 12 times over.”
Shadow childcare minister Alison McGovern has rejected the claim and told CYP Now that she is disappointed with Gyimah’s use of “dodgy sums” to over-cost the proposal.
“Labour’s plans for 25 hours of childcare are radical and will transform the lives of many thousands of parents and children, but they are also fully costed and deliverable,” she said.
“We are already consulting closely with the sector on ensuring that the funding system works for providers and will continue to do so in the run up to the election.”
Gyimah’s comments came at the launch of the NDNA’s 2015 Annual Nursery Survey, which suggests that the government’s flagship childcare schemes are significantly underfunded.
The survey claims that nurseries face a funding shortfall of £809 for every three- and four-year-old receiving 15 hours of free childcare a year and that government funding for childcare for disadvantaged two-year-olds falls short of the actual cost of delivering a place by £712 per child annually.
Addressing calls for the introduction of a funding formula to deal with the issue, Gyimah said the Department for Education will “see what we can do” in the future.
