The Government’s plan to expand the funded childcare for working parents of younger children “will not work” unless the amount paid to providers is correct from the start, MPs have warned.
Underfunding had left the sector “straining to provide” enough places for children, the Education Committee report found, with many nurseries not paid the amount required to properly offer spaces.
Education Committee chair Robin Walker said childcare providers are facing “significant challenges in affordability and availability” and “simply extending the number of hours that the Government calls ‘free’ will not work unless the funding rates accurately reflect the costs of providing high-quality early education and childcare”.
A report has been undertaken into the issue which has warned MPs to get the issue “right” the first time or face affecting the sector even further, and potentially forcing more closures of nurseries around the country.
The Government said childcare costs represent nearly 30 per cent of the average wage for a couple with two children, and are a barrier for parents hoping to return to work. Government plans would enable eligible working parents to access 30 hours of free childcare a week, among other reforms.
However, the plans have already been criticised by the opposition, which said there’s no use in having free hours “if you can’t access them
What free childcare has been announced in the budget?
The Government has said it will increase the number of free hours parents of young children will be able to access as part of the new childcare reforms.
How many hours of free childcare are available?
Parents of children aged nine months to two years old will initially receive 15 hours of free childcare a week.
By 2025, parents of children aged nine months to three years old will receive 30 hours of free childcare a week.
The eligibility will match the existing 30 hours offered for three- to four-year-olds.
How much is the Government investing in childcare?
Mr Hunt says the Government will provide more than £4.1 billion by 2027-2028 to fund 30 hours of childcare per week for working parents with children aged from nine months old to three years old in England.
The Government will uplift the hourly funding rate to providers, providing £204 million in 2023-2024, to be paid from September 2023, and £288 million in 2024-2025.
Who has criticised the announcement?
Labour leader Keir Starmer said: “Of course, more money in the system is obviously a good thing,” but added: “They obviously didn’t listen to when he said he’s actually going to do it.”
Starmer said it’s no use having more hours of free childcare “if you can’t access them” and said that parents not included in the offer may have to pay more.
When does the change come into effect?
From April 2024: Working parents of two-year-olds will be able to access 15 hours of free childcare per week.
From September 2024: 15 hours of free childcare expanded to working parents of children aged nine months to two years.
From September 2025: Eligible working parents of children aged nine months to three years will be able to access 30 hours per week.
How else will childcare change?
The staff-to-child ratios for two-year-olds will change from one to four to one to five, which will come into force from September 2023.
Mr Hunt says the Government will increase the number of childminders by providing start-up grants.
Furthermore, the Government will launch a wraparound scheme to expand school-based childcare from 8am until 6pm. The aim is for all schools to provide this care by September 2026.
Parents claiming Universal Credit will receive their childcare costs paid upfront and the maximum potential benefit will be increased.