It's not 'free', it's funded!

With new early years funding rates coming into force in less than two months, and the issue of underfunding still being swept under the rug by government, many early years providers are increasingly looking to ‘additional charges’ for goods and services such as lunch and trips as a means of staying afloat.

I know that today’s Nursery World story – that childcare minister Caroline Dinenage has advised struggling providers to charge extras to remain viable – will have come as welcome news for many providers seeking clarity on this issue. And yet, while we at the Alliance welcome the acknowledgement from government that current funding levels are insufficient, we remain concerned.

We have long argued that, if the government cannot afford to fund the so-called ‘free entitlement’ offer properly, it should come clean and admit that what it is actually offering is subsidised childcare. This would allow providers to make up the difference between the cost of delivery and government funding rates fairly and openly, while making it clear to parents that what they are receiving from government is funded, not free, provision.

But that is not what the government appears to be suggesting here. Instead, it is proposing to continue to promote 30-hour offer as ‘free’ to parents, while giving providers a back-door loophole by which to recoup some of their losses.

We know that continued underfunding has put many early years providers in completely unsustainable financial situations, and that for some, additional fees paid by parents for, for example, lunch and trips are a critical source of income. But our fear is that this is a short-term solution and one that gives the government an excuse not to tackle the issue of underfunding.

There is only so much you can charge for lunches, or trips, or nappies, and so while additional charges will offer a temporary reprieve to some providers, this may well prove to be inadequate in three years’ time when the national living wage reaches £9; rents, business rates and insurance costs are continuing to rise; and government funding still hasn’t increased a penny.

What’s more, we fear that over-reliance on such an approach risks creating a two-tier early years system, where those parents who are able to purchase extras have first choice on childcare places, while those who cannot afford to do so are pushed to the back to the queue. This is not a criticism of providers doing what they need to do so to survive. This is a criticism of the government for putting them in such a position.

I recently attended an early years conference where the question of additional charges came up and a senior representative was asked what would happen to those children whose parents could not afford to pay for additional services. The DfE official replied that they hoped that providers would have the ‘integrity’ not to offer a poorer level of service to those families only taking up ‘free’ hours.

And therein lies the problem. On one hand we have the government publicly declaring that all families should get the same level of service, free at the point of delivery. And then, behind the scenes, providers are being advised to charge for extras and/or operate a two-tier system to stay afloat.

When, come September, parents are confronted with additional charges for a scheme that the government is still promoting as ‘free’, who will be criticised? The government, with its 'record £6bn investment into childcare'? Or ‘money grabbing providers’, fleecing struggling parents for all they can?

Because as we saw with the recent discussion on The Wright Stuff, it’s still all too easy to blame rising childcare costs on ‘greedy’ providers – and unless government is honest with parents on this issue, this stereotype will continue.

If the government is happy for early years providers to deliver funded, rather than free, childcare, then yes, this is undoubtedly positive news for providers. But this needs to be an official government policy, clearly communicated to parents: 30 hours of funded childcare.

As it stands the government has been clear that, as a manifesto pledge, they cannot describe the 30-hour offer as anything but free. And so, while we await further clarity from the DfE on this issue, the Alliance will continue to campaign for fair funding to ensure providers are able to remain sustainable both today and in the future.