Childcare provider costs rocket by 20 per cent
Joe Lepper
Thursday, November 7, 2019
Costs for childcare providers have risen by 20 per cent over the last year as they battle to meet increases in staff wages.
This is far outstripping increases in government funding for nurseries, according to childcare sector leaders, who say extra money is needed to ensure early years remains "viable and sustainable".
The figures have been revealed in the Department of Education's 2019 survey of childcare and early years providers.
The average annual cost to settings of providing childcare this year is £240,333, an increase of 20 per cent of 2018's average of £199,708.
Meanwhile, the increase in council early years funding for 2020/21 is just two per cent.
The Early Years Alliance is warning that "even these small increases may not be fully passed on from councils to childcare providers".
The DfE figures show that staffing is the major cost for providers, accounting for 73 per cent of all their spending. This has increased over the last year through increases in national living and minimum wages, says the Alliance.
Rents and mortgages account for a tenth of all costs, while food makes up four per cent.
"These figures show just how woefully inadequate the recently-announced increase in early years funding truly is," said Early Years Alliance chief executive Neil Leitch.
"With ongoing increases in the national living and minimum wages, the cost of running a childcare business has increased hugely over recent years, and yet government investment into the sector has completely failed to keep up."
He is calling on all political parties to commit to increases in childcare funding ahead of this December's general election.
"With plans to both increase statutory wage requirements and expand so-called ‘free childcare' offers being mooted by various political parties, it's clear that, whoever is successful at next month's general election, a significant increase in childcare funding will be needed if the early years is to remain viable and sustainable," he added.
"We urge every political party to include a commitment to ensure adequate investment into the sector in their election manifesto."
A government petition by an Alliance member, calling for an increase in funding for pre-school settings, has this week hit the threshold of 10,000 for ministers to respond.
Well done, everyone – we've hit 10,000 signatures already!
— Early Years Alliance (@EYAlliance) 5 November 2019
Please keep signing and sharing while you can - let's make this issue impossible for the new government to ignore! https://t.co/X6lBxZ18Zh
In September, the Chancellor Sajid Javid pledged an extra £66m in childcare funding. However the Early Years Alliance branded this additional money "unacceptable and tokenistic" saying that it covers only 10 per cent of an estimated £662m shortfall that the sector is facing.
