Funded childcare expansion ‘unsustainable’ for childminders amid rising costs

Chancellor of the Exchequer Jeremy Hunt announced a raft of reforms to England’s childcare system in his latest Budget, including plans to expand access to funded childcare places to children over nine months old by 2025.

The reforms received backlash from childminders and organisations supporting the profession, who said that the funding available fails to account for the actual costs of providing a childcare place, leaving childminders with a shortfall in income.

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With the government expanding funded places to include younger children, “childminders risk making a loss on all children’s spaces, which will render it impossible to remain sustainable”, said Claire Kenyon, childminder and founder of the Early Years Equality organisation.

“For every funded child the childminder receives less from the government than their hourly rate, meaning that if they provide funded spaces they make a loss on that child. Some may be able to charge consumables as an extra on top of the funded rate but this is not always accepted by parents who believe the space should be free (because this is what the government tells them), and some local authorities forbid that entirely," she added.

Tracy Graham, childminder at Wildhearts Early Years Education and Childcare, said she is forced to ask parents to pay an additional service charge to offer a sustainable service and earn the equivalent of natinonal living wage.

“Currently if I offered totally free hours, it would mean I would lose £1.24 per hour per child which would equate to almost £500 per month - 25 per cent of my income," she said.

Experts and practitioners warn that expanding funded places may lead to further setting closures.

Neil Leitch, chief executive of Early Years Alliance, said: “Childminders need more support, greater recognition and, crucially, adequate funding for the existing early entitlement offers – but what they got was an underfunded expansion that will only pile on more pressure on an-already overburdened workforce and risks leading to even more closures.”

Nicola Moore, a childminder from West Yorkshire, said the proposals will “probably push me to the point where I have no choice but to close my doors”, adding that if all children in her care become eligible for funding, the shortfall in combination with the irregularity of local authority payments will make paying regular wages to her assistants unsustainable".

Former childminding professional Chloe Webster added: “In most local authorities funding payments are made termly, so if this extension comes into play and all the children a childminder cares for receive funding, that childminder essentially gets paid four times a year, at a loss.”

The budget announcement also included plans to deliver an incentive payment of £600 to first-time childminders, increasing to £1,200 for those who join through an agency, but this proposal also received criticism for failing to understand the needs of the profession.

Tina Maltman, operations manager at charity Childminders UK, said: “We do need more childminders and so financial assistance to help them register is welcome, but once registered, they need to be able to provide a good quality service and make an income from it. If all the children they care for are underfunded, they can’t survive.”

Leitch added: “Once again, the government showed it has failed to understand the needs of childminders, with throwaway policies like childminder agencies and paltry sign-up fees likely to do little, if anything, to stem the flow of talented professionals out of the sector.

“For far too long, the government has failed to recognise what a pivotal role childminders play in the delivery of quality, flexible care and education. It’s vital that ministers work with and listen to childminders to understand what is needed to support them, rather than rolling out rushed policies that will only serve to push them closer to a point of no return.”