Free childcare: Is Jeremy Hunt's Budget promise feasible?

Jeremy Hunt says the childcare reforms will remove barriers to work for half a million parents

The biggest ever public investment in childcare in England was announced in this week's Budget. 

At the moment, eligible parents can claim up to 30 hours of free childcare for three and four-year-olds, as well as 15 hours for some two-year-olds.

The reforms will extend this to all children from nine months to five years by September 2025.

But the plans face major hurdles in funding, staff recruitment and the availability of childcare spaces.

'Get the funding right'

Nursery providers say the amount the government pays them for free childcare hours - known as funded places - does not cover the costs of providing those hours.

The shortfall is around £1.82bn, the Women's Budget Group estimates. Most make up the difference by increasing the fees for non-funded places, or charging for extras such as food and day trips.

The government said in the Budget that the hourly rate it pays to local authorities for funded places for two-year-olds will rise by 30%. For three and four-year-olds, it will rise by 4%.

Kara Jewell opened a new nursery in Portsmouth last year because of the lack of provision for families in her area - but it's currently operating a loss.

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She says that with the minimum wage due to rise in April, if the funding remains this low "there will be no nurseries left" by the time the roll out of the new plan begins in April 2024.

The Institute for Fiscal Studies predicts that once the government's new reforms are fully introduced in September 2025, ministers will be in charge of the price of childcare for 80% of all pre-school children in England. "It raises the stakes for getting the funding right," the think tank says.

There will be far less scope for providers to make up funding shortfalls by cross-subsiding, the Early Years Alliance explains, which could have "dire consequences for the sector".

The Department for Education said by 2027-28 it is expecting to be spending in excess of £8bn every year on free hours and early education, and that there will be further uplifts in the funding rates.

Lack of qualified staff

The government's plan also relies on recruiting qualified staff to cater for more children attending nurseries and childminders.

But the sector already struggles to recruit and retain staff.

"You can't do these developments if you don't invest in the workforce" Prof Eunice Lumsden, the head of childhood, youth and families at the University of Northampton, explains.

She says the early years sector has one of the most crucial workforces for both the economy and children's lifelong outcomes - and that "pay scales must be at the right level".

Nursery providers say there is currently a shortfall in funding for free hours, a shortage of staff and a lack of childcare places

Hourly rates are well below the average of other occupations, says Kerris Cooper, from the Education Policy Institute. This puts people off entering or remaining in the sector, she says.

Prof Lumsden says the government has put money into raising the quality of the workforce - but it's not addressing the wider issues. "We never have a recruitment campaign talking about how we need the best of the brightest working with our youngest children - it is such a skilful important job that is so undervalued."

Plans to relax ratios on the number of children each adult can be in charge of from September is also likely to drive more educators out of early years, Neil Leitch, from the Early Years Alliance, claims.

Currently one adult can be in charge of four two-year-olds, but that will now be increased to five children.

The Department for Education says the change will give providers more flexibility, although its consultation on the issue found that most places were unlikely to introduce it because of safety concerns and staff workload.

It says it will work closely with the sector to develop plans to grow, develop and support the workforce.

Shortage of childcare spaces

When the government's plan rolls out, more parents will be looking for a space for their child in a nursery or a childminders - but there is already a shortage of spots.

Nearly half of areas do not have enough available spaces for children under two, and a third don't have enough space for three and four-year-olds, according to the latest Coram report.

So a key proposals from Chancellor Jeremy Hunt is to encourage more childminders to enter the workforce.

New joiners are set to receive £600 when they sign up as part of a pilot - and this will increase to £1,200 for those joining through an agency.

More than 10,000 childminders have closed in the past five years, according to Ofsted.

Childminder Kara Jewell says they are not recognised as professionals and face the same issues with funded hours as nurseries

Kara Jewell, the nursery director at Sparkle Lodge Early Years, also works as a childminder. She says the money will help childminders to start up, and pay for things like health declarations, insurance, and resources.

But "the funding issues are the same" for childminders as with nurseries, she says - the money given by the government for the current free hours is too low.

She believes that childminding also needs to be recognised as an education profession.

The Department for Education says more will be announced on this shortly.

Prof Lumsden says that on paper, the plan looks like an amazing offer for families.

In reality, "we have to see how it works out, because for me it's about whether our kids are safe and having the right qualified staff around them".