Strain on parents' incomes spells uncertainty for extended services

Almost a quarter of breakfast clubs, after-school clubs and holiday childcare providers fear for the future of services over the next academic year with rising costs and increasing pressure on parents' incomes, a survey by the charity 4Children has revealed.

The study of 492 extended services providers found that almost 10 per cent of respondents are at risk of closure during the next school year.

A further 15 per cent of providers are in limbo, unsure as to whether their service will be maintained because of uncertainty over future funding.

The survey found that demand for breakfast clubs, after-school clubs and holiday childcare schemes has dropped in 38 per cent of settings over the past year, with pressure on parents' incomes and unemployment cited as the two main factors fuelling the decline.

"It is very difficult to keep childcare affordable for working parents in the current climate," one provider warned. "Staff costs are rising again in October and food costs are high. To sustain the level of care we are offering at the moment may become difficult next year."

Asked to cite their main concerns for the year ahead, 66 per cent of providers said that a drop in parents' incomes will continue to pose a threat.

Half said they were worried about the rising delivery costs and almost 50 providers mentioned increasing numbers of academies and free schools as a concern.

A quarter said a waning emphasis on out-of-school activities could damage services, with 65 providers saying their school seemed to be ambivalent about provision and 11 describing their relationship with their school as negative or deteriorating.

One provider explained: "There are many worries this year. Last year, one school decided it would increase our rent from nil to £34,000 per year. Three of the other schools we work in have increased the rent by 66 per cent."

Another said: "Our rent will increase from September so sustainability has become a great concern. We will make a decision regarding closure at the end of winter term."

The previous government set a deadline for all schools to offer a full range of self-funding "sustainable" extended services by 2010.

According to the 4Children survey, three-quarters of extended services providers are operating without funding from their local authority and 95 per cent of extended services receive no funding from schools.

But of the providers that do receive local authority cash, 81 per cent are either facing cuts or uncertainty over budgets, while 59 per cent are losing a quarter or more of council funding in the coming year.

Providers in receipt of cash from schools are facing similar challenges. Of the five per cent of settings that do receive schools funding, 83 per cent are expecting to lose a quarter or more of their current income.

4Children chief executive Anne Longfield said that extended services have been partially protected from cuts, since so few are reliant on local authority or school funding.

But she warned of serious threats to the future viability of services because of "the unprecedented increase in running costs".

"Changes in local charging policy and moves to academy status are often the catalyst to this change, which runs the risk of putting many clubs out of business," Longfield said.

"Out-of-school clubs have worked hard to become self-sustainable, which has shielded them from the impact of local cuts.

"However, they have also followed government advice and encouragement to work in partnership with schools, which has often meant moving into school premises.

"Increased rental costs are therefore a bitter blow, which could put the future viability of some clubs in real question."

4Children survey of out-of-school providers
If you received funding from your local authority during the last school year, do you expect that funding to change from September?
Don't yet know: 37.7 %
No, it is staying the same: 19.7 %
Yes, it is going down: 41.8 %
Yes, it is going up: 0.8 %

If your funding from the local authority has reduced, how much has it been reduced by?
More than 50 per cent: 40.3 %
26-50 per cent%: 19.4 %
Less than 10 per cent: 13.4 %
11-25 per cent: 26.9 %

Have you seen a change in demand for your provision over the past academic year?
No change: 17.4 %
Yes, demand has decreased: 37.8%
Yes, demand has increased: 44.8%

If you received funding from your school during the last school year, do you expect that funding to change from September?
Don' t yet know: 32%
No, it is staying the same: 24%
Yes, it is going down: 42%
Yes, it is going up: 2%

If your funding from the school has reduced, how much has it been reduced by?
More than 50% 57
Less than 10% 4
11-25% 13
26-50% 26

Do you believe your provision is sustainable for the next school year?
Yes: 75.8%
No: 9.4%
Funding decisions not yet made: 14.8%

Have you seen a change in demand and why do you think this is?
Parental working pattern 72.4%
Change in parental income 57.7%
Change in quality of service 11.4%
Hours offered to parents 10.8%
Change in school priorities 8.7%
Change in LA priorities 7.0%

What are your biggest concerns for the year ahead?
Drop in parents' ability to pay 65.8%
Rising costs 50.3%
Reduced out-of-school activities 26.3%
Drop in funding 19.1%
Other 16.8%
None 13.2%
Changes in organisation 10.4%
Source: 4Children.