Public funding drives up child care prices

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By Rachel Lawler

86% of early childhood providers say the funding they receive for three- and four-year-olds does not cover the cost of creating child care spaces, as a new Alliance survey shows how under- Government funding drives up child care costs.

The Alliance surveyed nearly 2,000 childcare providers about rising fees as the cost of living crisis hits families.

Two-thirds of respondents said they would raise fees this year, with 35% of providers saying they would not raise fees at all if funding covered their costs, while 43% said they would not. would not increase costs as much.

Worrying prospects
Among providers whose local authorities had already confirmed their funding rates for April 2022, 90% said this would not be enough to cover the cost of providing funded childcare places.

About a third (30%) of providers surveyed said they were currently operating at a loss, while 34% said they expected to be operating at a loss 12 months from now.

A whopping 98% of respondents said the government was not doing enough to support the early years sector at the moment.

Parent concerns
A parallel survey of 27,000 parents, conducted by activists Pregnant then fucked and online forum Mumsnet, found that 62% of parents now spend as much or more than their rent/mortgage on childcare.

A quarter of parents said they had to cut back on necessary expenses such as food, heating or clothing in order to pay for childcare and 43% of mothers had considered quitting their job due to the cost of childcare.

A whopping 99% of parents said the cost of childcare makes the cost of living crisis even harder for them.

Pregnant Then Screwed has launched a campaign called #UnHappyMothersDay to raise awareness of the many challenges mothers face. They will deliver their petition calling for an independent review of the childcare system at 10 Downing Street and hand out #UnHappyMothersDay cards to influencers and MPs to raise awareness of the campaign.

Supplier crisis
Early childhood providers themselves are also grappling with the cost of living crisis. 73% of those surveyed by the Alliance had not received a pay rise in the past two years and 15% of those surveyed currently receive or have previously received Universal Credit.

Of the providers surveyed, one in 20 had used a food bank in the past two years and 31% currently had an overdraft in their personal bank account.

Almost half (48%) of respondents to the Alliance survey said they were actively considering leaving the childcare sector (42%), currently doing so (5%) or they had already done so (1%).

Defaulting financing rates
Neil Leitch, Managing Director of the Alliance, said: “Early-year funding has consistently failed to keep up with soaring costs, leaving many providers no choice but to raise fees over the course of the year. Year Ahead: This says a lot about more than a third of our survey respondents saying that if they were adequately funded, they wouldn’t raise fees at all this year.

“With the vast majority of providers saying the funding they receive is lower than the cost of providing places and even more worryingly, even those who are due to receive funding increases in April tell us that this will not be enough to cover costs delivery, things will get worse before they get better.

“Suppliers now face a precipice, with more than a third of childcare businesses currently operating at a loss (30%) and even more (34%) expecting to be operating at a loss a year from now – but this could all be averted if the government finally admitted there was a problem and took steps to close the growing funding gap.

“Early childhood providers offer a lifeline to working parents and vital early education for young children, but it is becoming nearly impossible for them to offer these essential services at affordable prices. The government must fill the sector’s funding gap before more parents – and especially mothers – are forced to pay ever-higher prices and jeopardize their careers to ensure that their child can receive care and good quality education.

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