ÎÞÂëÌìÌÃ

By Shannon Pite

Early years funding rates will increase in line with provider delivery costs over the next two years, the government has announced.

Speaking during today's budget, Chancellor Jeremy Hunt said:  "A year ago, I also announced the biggest ever expansion of childcare... this will mean an extra 60,000 parents enter the workforce in the next four years – a tremendous achievement for the Education Secretary. Today, in order to support the childcare sector make the new investments it now needs, I am guaranteeing the rates that will be paid to childcare providers to deliver our landmark offer for children over 9 months old for the next two years.

"More people in work and more jobs, sticking to our plan in a long-term Budget for Growth."

The Treasury has confirmed that the metric used to increase rates over this period will be a combination of inflation, earnings and the National Living Wage, and that it would "reflect that workforce costs are the most significant costs for childcare providers".

It estimates that this commitment will result in an additional investment of £500 million over the next two years, though this is subject to change depending on inflation levels and changes to the national living and minimum wage.

Commenting, ÎÞÂëÌìÌà CEO Neil Leitch said: "We at the ÎÞÂëÌìÌà have long called for a mechanism to ensure that early years funding rises in line with provider delivery costs, and so welcome the fact that today's announcement should help prevent the current funding gap from widening even further over the coming years.

"That said, what this policy does not do is to close this gap in any way, or address the wholly inadequate funding baseline from which providers are forced to operate. With the early years funding shortfall estimated to stand at £5 billion, it is clear that there is still much more to do to build and sustain an affordable, accessible and high-quality care and education sector over the long term.

“We know that the early years is facing its most challenging time in decades. Not only have years of underfunding wreaked havoc on the sector – prompting both a surge in setting closures and the worst staffing crisis in years – but the sector is just weeks away from the biggest expansion in early entitlement hours, with many settings warning that they do not have sufficient funding, capacity or space to meet the likely surge in demand. As such, while today is certainly a positive starting point, much more support – including significant long-term funding and a comprehensive workforce strategy – is crucial if nurseries, pre-schools and childminders are to be to able to sustainably deliver both existing and upcoming entitlement offers. With many settings already on the brink of closure, simply maintaining the status quo is not an option.

“Today's Budget hints at a renewed approach to how the early years is recognised – but rather than being viewed as a solution to the early years crisis, it must be seen as the first step of many that need to be taken to safeguard the future of our vital sector."