PROVIDERS BACK FREE CHILDCARE GUIDANCE

Providers have welcomed the guidance but warn the process may highlight the gulf between funding allocated and the actual costs to providers.
The guidance is the first stage of the government’s promise to reform funding for the free entitlement, which is currently 12 hours a week for three and four year olds, but is to be extended to 15 hours a week by 2010.
The government has asked local authorities to assess the cost of providing the entitlement to children through using private, voluntary and independent providers. These assessments will need to be presented to schools forums before budgets for 2008-11 are set. And by 2011 at the latest, local authorities will have to develop and introduce a single funding formula for early years provision in both the state and private sectors.
Organisations such as the National Day Nurseries Association and the Pre-School Learning Alliance have campaigned for reform of the way the entitlement is funded, saying the amount of money allocated is often not enough to cover the costs of provision in the private sector. They point out private settings have far higher overheads than state-maintained settings making it harder to make a profit.
Purnima Tanuku, chief executive of National Day Nurseries Association, said it was important providers were fully involved in the assessment process so local authorities could develop an accurate idea of costs. “This process will in some cases highlight the difference between costs and actual funding, and there is still a big question over whether this process will lead to the increased funding that a significant number of providers need to make the free entitlement sustainable,” she added.
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