Officrèche Blog

Who’s for 30 free hours of childcare a week?

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UPDATE: we are currently trying to understand how best to work with this scheme at Officrèche, as it will be available from September 2017. We want to hear from parents who are eligible. We’d love to get your thoughts on the 30 hours free childcare from our survey, which you can take here.

Who’s for 30 free hours of childcare a week?

On the face of it – who wouldn’t be? The cost of childcare takes a large percentage of a family’s monthly budget and reducing it by 30 hours each week should enable parents to plan and work without this millstone around their financial necks.

The eligibility criteria: to qualify, all parents in a single or dual parent family need to be working a 16 hour week, with a maximum earning of £100,000 per year per parent. What does that mean for freelancers? It seems that you could earn the equivalent of 16 hours a week minimum wage, but who will look at your accounts and judge that – your nursery or HMRC?

The parent point of view: “I would welcome having access to more childcare hours for my son who will be 3 when the new allocation comes into place. For a freelance worker every penny counts and for us it would be a financial relief to not have so much to pay out. We have 3 children so as you can imagine childcare could be out of our reach if it wasn’t for the early years scheme. I do wonder though if this will have a knock on affect with the staff and child ratios or the quality of nursery care. Where I gain a nursery will lose and I can only see this being a tragic knock for some of our local well thought of nurseries and their staff. After all, nothing really does come for free.”

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The nursery point of view: we all need to do some ruthless calculations to work out what we can afford to offer and still function as businesses. Officrèche has not finalised the calculations yet since Brighton and Hove Council are scheduled to begin offering the free hours in September 2017. The pilot schemes begin this coming September and are in Wigan, Staffordshire, Swindon, Portsmouth, Northumberland, Newham and Hertfordshire. We will be watching with interest and mulling the following issues:

The variables for nurseries

How much will the hourly rate provided by the council be? This is vital to compensate for the lack of families’ monthly fees – it may be too low to make it worth a nursery’s while, given monthly running costs, especially with introduction of living wages. This is a different computation for each nursery – and each council. In theory, Brighton and Hove Council will be signed up to provide the Brighton Living Wage (more generous than the National Living Wage) and this should apply across all their council run nurseries. So the hourly rate paid back to Brighton and Hove nurseries – whether council run or private – should take this Brighton Living Wage into its computation and consequently be more generous than elsewhere in the country….

Will there be a shortfall in nursery running costs if only the hourly rate from the council is received in payment for families accessing the funded hours?

Legally, families must be allowed to access the Early Years Free Entitlement (whether 11.5 or 30 hours a week or anywhere in between) alone and pay no extra fees to a nursery. Traditionally nurseries make up the shortfall by making their EYFE hours available at awkward times of a working day, so that most fully working parents will need to top up the free hours with fees paid. If parents are now accessing 30 hours free a week – that could be 7 hours each day – they may not need to top up their free hours with extra paid ones.

How big could the shortfall be and still be manageable by adjusting other parts of a nursery’s cashflow?

This is a particular computation for each nursery – other parts of the nursery’s cashflow could include a reduction in staff salaries (although childcare professional wages are currently low anyway, not something that encourages education and vocation in school leavers…), an increase in per hour childcare costs for non-EYFE funded children (e.g. 1 and 2 year olds).

What will each nursery offer?

Some could offer no funded hours on offer at all, others 30 free hours in school terms for only a few kids in that age range (how to select these children, first come first served, sibling link, means testing?), others 23 hours for every week of the year so creating more of a need for a top up for fulltime working parents.

The emotion

We nurseries are doing sums and looking for the best way to offer cost-effective places for as many children as possible, so that they are looked after by well-motivated, trained and remunerated staff. And in the back of our minds there is an emotional realisation that this increase in funded hours is about getting more parents on the working tread mill, which may not be the best thing for an individual family.

Let us know what you think please.


  • Petra Sullivan

    As a nursery provider (Redhill, Surrey) I too am looking forwards to Sept ’17, and the introduction of the 30 hours. Looking for ideas of how this can be delivered without taking too big a hit on the bottom line. Would like to network with others to see what bright ideas there are out there to do this. I am sure the big chains will offer the 30 hrs, and I believe they won’t accept a financial loss – how will they manage this?

    Grateful for any ideas or suggestions!

    Reply

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