Sector Questions if Funding Will Be Sufficient
If there is one thing everyone agrees on is that funding high quality childcare is expensive. This is not to say it is not worth every penny spent and more, but even so, whether the money comes directly from parents or from a local authority pot allocated by central government, the costs quickly mount up. Concern about cost is why until only a few weeks ago the Treasury was reported to be opposed to any large scale reforms. Yet as was made clear in the budget, these objections appear to have been dropped.
This is not to say however that the proposed increase to the 30 hours entitlement is funded appropriately. While the government has promised a significant increase in the funds paid for 1 and 2 year olds, and at least some uplift for 3 and 4 year olds, many in the sector are concerned the sums do not add up. With a current shortfall estimated at £1.8 billion but only around £200 million has been allocated by the government to make it up. A further £4 billion has been allocated to fund the entitlement expansion. While this is a significant sum, it is only around half of what the CBI estimated a similar policy would cost.
The childcare sector has been vocal in its response, and the media made the story front page news. Many providers fear that if the government does not significantly increase funding, the proposals will simply be unworkable, driving existing settings out of business. However, it is worth recollecting that when the existing 30 hours policy was first proposed in 2015, it was badly undercosted. Although the funding deal eventually agreed has led to the shortfalls we now see, it was a very considerable increase over what was originally proposed.
Ultimately it may not even be this government that ends up implementing the policy. A General Election must happen by January 2025 and although much can change between now and then, on current polling the chances of Labour forming the next government are higher than they have been for decades.