Nursery Management

Free childcare: Quality or Quantity

How can the government and sector make the 30 hours offer sustainable? Chris Townson looks at the issues…

History is littered with examples of companies that have tried to shift focus: mass-market producers that wanted to offer greater quality, quality providers that looked to expand. But to deliver both quality and quantity is easier said than done, as the childcare sector demonstrates.

Over the past few years government has spent both time and money trying to deliver improvement. It has offered incentives to boost the recruitment of graduate-calibre staff, tinkered with entry-level qualification and striven for better outcomes at inspection. A true drive for quality. Meanwhile to meet the quantity challenge, a large amount of capital investment has been placed into the Sure Start programme, while schools have become the go-to solution to meet demand in two-year-old funding.

Recently, however, both local and national government has been forced to accept that the long-term funding to support ‘state’-run childcare providers isn’t sustainable, and local authorities have been cutting back on much-needed support, admitting that the ongoing losses are too high.

For years the PVI sector has been campaigning for a better long-term plan for the sector as a whole. It has watched local authorities pay salaries unsustainable in the real world, which in turn has driven up their cost. It has seen government funding for ‘free places’ slashed in real terms and, to make things worse, it has watched the government stand back and infer that the high price of childcare is down to the greedy nurseries.

But the bubble is finally about to burst. In the run up to any election there is always an issue that becomes the battleground for votes, and in 2015 it was childcare. One party promised something, completely un-costed, to gain votes, so another promised a little more. Finally, the Conservative Party played the ultimate bluff – a pledge to double the currently underfunded ‘free hours’. They probably never thought they would get a mandate from the electorate to deliver this outrageous idea, but they have. Now the fun starts.

Facing reality

At this moment in time the government doesn’t have a plan to get itself out of the massive hole it finds itself in. It is posturing with meetings and consultations [the text document you can download from this page features the questions it put to one recent gathering of sector representatives - Ed.]; it is pretending to listen to cost arguments, but doesn’t have the financial resolve to deliver. But as a nursery we know there is no way back on this promise – no climb down, no plan B. We have accepted our role is not to hold back the tide, but to channel it as best we can. We have engaged with government and have volunteered to pilot the planned roll-out in September 2016.

We have learnt over the past 20 years we can’t beat the system:

●  We can’t waste time and energy saying that £3.78 per hour for quality care isn’t enough.

●  We can’t fight to make fair the Single Funding Formula that gives ‘state’-run nurseries more money than PVIs.

●  We can’t force government to listen to the fact that they might give our local authority one amount per hour (approx. £4.51) but after top slicing we only get £3.78 per hour!

Of course, we also can’t do a number of things that the government needs desperately now:

●  We can’t double our total number of spaces.

●  We can’t increase the number of three-year-olds we can afford to take.

●  We can’t work with children on a 2:26 ratio – because our staff would leave the sector.

The line in the sand is therefore drawn and guess what, we can’t do nothing.

The conundrum of quality versus quantity must now be addressed, and a proper funding structure must be put in place to ensure every child can attend an outstanding nursery. There is no point in the sector saying the funding isn’t enough; it must embrace this once-in-a-generation chance and deliver a new, properly funded and exceptionally well-qualified UK childcare workforce, which our children deserve and we all strive for.

Making it work

Coming from a successful, profitable nursery, I view the glass as always half full. There always have been opportunities for good, well-run companies to thrive in the sector. We have struggled to pay staff what they deserve for the responsibilities they have – we didn’t compete with the ‘state’ sector, but now the playing field is finally levelling. We have been able to increase our wages to the new ‘living wage’ already; we are now finally becoming the stable business of choice for the best practitioners to come to work for. All this change is a good thing.

For sure the next months are scary. A minimum wage increase in October plus the compulsory living wage in April 2016 has made us review budgets and costs, but by reacting to the change and not fighting it we are already moving forward – even if it has meant an 8% plus increase in our wage bill.

We will fight to get the correct level of funding to ensure we attract the children that need us most. This funding amount is actually being paid from central government already – if it wasn’t top-sliced by the local council, we would break even.

Now, you might think my view is that all is positive, but it isn’t. We are very fortunate: we are a full nursery and working parents using us for full days are, at the moment, helping out those few we have accepted that use us for 15 hours only – but this cannot continue in 2016. We currently actively seek not to take funded-only children; it simply doesn’t work financially.

So here is the sting in the tail for the government: either make it worth our while or build a new nursery at a massive cost both in capital and ongoing losses. This time they can’t go to the schools’ network – schools have said things are unsustainable in terms of both funding and space – so they will have to embrace the change you want. Sign up and be counted.

You see, for once everyone needs each other to make it work – back to that phrase: ‘a once-in-a-generation chance’...

Time for change

How to make settings, and the government’s 30-hour pledge, sustainable…

1. We should provide honest data to give a proper costing model.

2. The government should pay nurseries direct – taking out the top slicing. If LAs then can’t provide support, so be it; we can buy in expert help when needed.

3. Any funding agreement should be index-linked moving forward, reflecting the increased salary costs in the sector. Quality costs, and funding must reflect that fact. Any percentage increase in minimum wage, etc. should be matched in a funding increase.

4. When a proper scheme is in place, nurseries should commit to the number of funded places they will take.

5. Food costs need to be addressed and paid for by either parents or the government – not nurseries.

6. VAT and business rates should be made to fall in line with schools, and equal across the sector.

7. Childcare should be taken out of the political arena and a cross-party agreement should be signed, ensuring a formula that lasts.

Chris Townson was co-director/owner of Toybox Nursery, Great Denham.


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