Letters to the Editor: Hourly childcare rate not enough

The Daycare Trust welcomed the Department for Education’s announcement of funding for the two-year-old offer (‘Early years providers dismayed by hourly rate for disadvantaged two-year-olds’, cypnow.co.uk, 27 November).

The additional £100m capital funding was particularly welcome. But we have some reservations about the level of revenue funding for this programme. The DfE’s announcement indicated that an average £5.09 an hour is being made available to providers to deliver the offer, then cited Daycare Trust’s calculation of the average cost of childcare was £4.13 an hour, with the inference that providers will get a generous settlement.

However, our cost estimates are based on a full-time early education model, where working parents purchase many more than 15 hours of care, over a full year.

It is more expensive to provide 15 hours of early education for disadvantaged two-year-olds over 38 weeks than a full daycare model (where providers cross-subsidise between different groups of children and receive income over the whole year).

In addition, children who will qualify for the two-year-old offer in 2013 and 2014 are more likely to have special needs, which require a higher level of funding. A-level of £5.09 per hour is simply not enough to cover costs, with the trust’s research showing £8 an hour is needed in London. Already, significant numbers of providers have opted out of the offer.

The two-year-old offer has the potential to boost the life chances of the most deprived children. But a shortfall in funding risks compromising this ambitious policy. A small amount of extra funding would get the buy-in of providers and the essential local authority infrastructure needed to make this scheme a success.