Business sustainability - 30 hours free childcare

There is a lot in the media about 30 hours ‘free’ childcare being offered to working parents who fit certain criteria. These hours are not free however, and they never have been, they are government funded, and oftentimes, provider subsidised.

The 15 funded hours have always been underfunded for private, voluntary and independent providers, and fee paying children attending those settings have always subsidised the funded children. State providers are paid a higher, more sustainable rate. Hence many children leaving private settings for State settings the term after their child turns 3 years old.

The implementation of doubling those hours has now doubled the underfunding and exacerbated an already financially tenuous situation for many nurseries, childminders and preschools.

Why has this 30 ‘free’ hours policy been brought in? Chiefly to fulfil a politician's election campaign promise and to get parents back in to work. It sounds good, and should save (certain) parents childcare fees, but herein lies the dilemma.

Some providers can afford to provide childcare at the funding rate they are provided, however many cannot, especially in London. The funding allocated does not cover the actual cost of delivering quality childcare.

So if your childminder, nursery or preschool has a higher hourly cost of providing childcare and education than that which the government is paying, what can they do?

  1. They can opt out, providing no funded places, all places will be fee paying.

  2. They can charge for extras – these are allowable consumables that were possibly previously within your childcare fee, e.g.: meals, craft materials.

  3. They can charge fee paying parents more to cover the short fall they receive for their funded children.

  4. They can allow funded children to come for certain hours in a day per week, prioritising fee paying children so they can allocate staffing accordingly, and be able to pay their bills. This hour allocation might not be ideal for working parents.

Running a quality driven childcare setting costs money. Staffing costs are a high percentage of monthly income. Private rents are most often at a competitive commercial rate, and not subsidised, as many were traditionally.

With a promised fixing of the funding amount till 2020, this doesn’t allow for annual increases in business costs - business rates, national living wage, pensions, rentals, food, insurances, training etc.

Historically local authorities would provide a vast array of free/subsidised training for early years staff. Not any more. The statutory training (e.g.: Safeguarding; First Aid; British Values) and non-statutory training to improve one’s practice (e.g.: Language Development in 2 year olds; The Importance of Messy Play; Special Needs and Disabilities) is expensive. Training is needed to ensure managers and practitioners are well equipped.

The funding being set at a static amount for the next three years was going to be hard to cover, but now to have it decrease in 2018 is not only unacceptable, but hugely problematic for childminders, nurseries and preschools.

Parents, please realise that those that work in early years are incredibly passionate about what they do, they love working with children and supporting them to reach their full potential and age-appropriate developmental milestones.

If your provider cannot provide fully funded hours that suit you, or they ask you to pay toward consumables, please understand the predicament they are in, and support them. Sans your support at this crucial time, many more early years settings will close. Many have already closed this year, nationwide, as they realised they would not be sustainable once the 30 ‘free’ hours policy rolled out in September. Business sustainability is at varying levels of risk for providers, depending where they are in the country.

Which then begs the question: Where will your child go if your nursery/preschool/childminder closes their doors? Work together with your provider to ensure this does not happen. Children deserve nothing less.



Jennifer McQuillan is a thrice Outstanding ex childminder, who founded an award winning SW London preschool nursery. She is passionate about early years childcare and education, with a special leaning toward special needs and disabilities. She is the Africa Representative for the Preschool Learning Alliance children's charity. Now based in South Africa, she runs Imbali Early Years Consultancy and is involved in a variety of education-based projects.