DfE 'unable to understand' cost of childcare following review
Neil Puffett
Friday, October 2, 2015
The Department for Education (DfE) has said it is "unable to understand" the true cost of delivering the free entitlement despite more than 2,000 responses from the sector to its review of the cost of childcare.
The government launched the review in August to understand how the extended provision for all three- and four-year-olds will be paid for.
The findings of the first stage of the review states that while the majority of responses listed the factors that providers perceive to be their main areas of expenditure, these were “often not supported by figures”.
“This means that we have been unable to understand which costs are as a result of delivering the entitlement and which are not,” the document states.
“This may indicate a lack of clarity around what government funding should pay for.”
The document goes on to state that while some respondents did provide more detailed accounts of their outgoings, opening hours and number of entitlement hours provided, others reported their perceived funding shortfall when comparing their local authority’s funding rate with the price they charged parents.
“While we have been able to identify what providers perceive to be their main areas of expenditure, we were unable to determine from the responses what providers’ unit costs were.”
The Pre-school Learning Alliance has described the review as an "exercise in futility". It said the scope of the consultation was far too broad, and likely to result in "responses of limited practical value".
Neil Leitch, chief executive of the Pre-school Learning Alliance, said: "We are disappointed, but not surprised, that this consultation seems to have been an exercise in futility.
"As we warned at the time, the scope of the consultation was far too broad, and likely to result in responses of limited practical value.
"The DfE has complained that responses 'were often not supported by figures' when it did not ask for figures in the original call for evidence – instead, it simply instructed providers to give 'any information' they wished to provide.
"As a result, the conclusions drawn from the call for evidence – that staff, rents, utilities and equipment account for a significant proportion of provider costs – are nothing new, and are likely to be of limited value to peers as they debate the Childcare Bill at report stage.
Findings from the review will go on to inform decisions taken during the Spending Review on the funding rate.
The government wants to extend free childcare entitlement for three- and four-year-olds from the current 15 hours to 30 hours each week by 2017. A trial is due to get under way in September next year.
Last month Education Secretary Nicky Morgan revealed that hundreds of early years providers have already volunteered to take part in the 30-hours free childcare trial.
The government has not yet said how many providers it will select or a target figure for the number of childcare places the trial will involve.
