Over the last week, there has been lots of debate around a key, and not unfamiliar, topic within the early years sector – childcare funding, says Chris Reid, chief executive of Connect Childcare.

The ‘March of the Mummies’ protest – organised by Pregnant and Screwed – saw over 15,000 mothers and families across 11 UK cities, gather to call for reform on three core issues – affordable high-quality childcare, maternity and paternity benefits, and default job flexibility.

The demonstration aimed to bring to the government’s attention how “extortionate childcare costs” – even referred to as ‘the second mortgage’ – are forcing many of the country’s parents out of work, and how change needs to happen.

We’ve worked within the early years sector for over 18 years, and we not only support and echo a need for action from the UK’s policymakers, but we understand this funding crisis from nursery managers’ perspectives, too.

Parents rightly feel frustrated by the rising cost of childcare, but this lack of financial support from the government extends throughout the entire system.

It was only in March this year that a survey from the Early Years Alliance revealed that 86% of early years providers said the government funding they receive for ‘three- and four-year-olds does not cover the true cost of delivery. As a result, many providers are having to absorb this.

Nurseries do not want to pass on any costs to parents, but they are being driven to increase their prices to try and keep their doors open.

This is compounded by OFSTED recently revealing that between April 2021 and March 2022, there was a net overall decrease of circa 4,000 childcare providers.

There, undoubtedly, needs to be more recognition, appreciation, and value given to the work the early years sector does, but this must be in tandem with the right level of financial support, otherwise, the challenges facing providers and families won’t be resolved, and the UK will continue to have the second most expensive childcare system, globally.

Voices of the sector

June O’Sullivan, chief executive of the London Early Years Foundation (LEYF), said: “As someone who runs one of the UK’s largest charitable social enterprises with 39 nurseries across London, it’s shocking how this drastic underfunding is driving the cost of childcare up and the quality of service down across many nursery providers. This is particularly disgraceful given it impacts even more on children from disadvantaged backgrounds.

“There is clear evidence that children who attend nurseries with good quality care and education help achieve better outcomes in life. Considering the childcare sector makes an annual contribution to the GDP of £6billion and provides a childcare infrastructure to enable more than a million families work, surely we all deserve better.”

Liz Debenham, founder and chief executive of Wizard Nursery Group, said: “We cannot afford to deliver the ‘free’ childcare entitlement on the money given to us by the government. With the cost of living rising and energy bills soaring, this will only exacerbate the problem of underfunding.

“One issue that has arisen from underfunding is the number nurseries that can afford to pay their staff, and because of this being so low in many cases, great practitioners are leaving the sector to earn more money working in their local supermarket. Childcare these days is a real vocation, you don’t do it for the money but for the love of making a difference in children’s lives.

“We have been advertising for staff for months across all our settings and noticed that the candidates who do apply only want to work part-time, very few want a full-time job.

“The choice is very stark – close the setting, increase the fees charged to the parents, or the government acts and boosts the funding to cover all the costs properly.”

Jade Taylor, senior nursery manager at Giant Leap Childcare & Learning Centre, commented: “The funding debate has been ongoing for many years however, in recent times and following on from the pandemic, the effect of the lack of sufficient financial backing has become far more detrimental to our sector.

“We are trusted by parents to look after their children – care for, teach, and educate them, and support families – and this is an ever-evolving role. However, despite our crucial role, we do not gain the same respect as teaching staff in education.

“While increasing ‘free’ childcare hours to parents and providing benefits for them to access provision has been a governmental priority, the rate that funding has increased during the same period does not meet nor reflect our ever-increasing costs – such as minimum wages and energy costs. This has seen many of our experienced and committed team members leaving the sector completely, which is devastating.

“We as a sector have continually voiced our concerns, and the recent evidence of the number of early years providers decreasing, surely needs to be urgently listened to by those who have the power to change the future and allow early years to become great again.”

Heidi Wright, nursery manager at Brook Farm Children’s Nursery, said: “We fully empathise with working parents and carers who require our essential childcare services, to enable them to work during this extremely difficult ‘cost-of-living’ crisis.

“The government must recognise the need to invest heavily in early years care and education to support both families and early years providers, especially in light of inflation having reached an all new high of 10%.

“As an early years setting, we do not want to keep passing that cost on to parents – who are already attempting to manage all their other increasing financial demands – but sadly we need to remain sustainable as a business.

“We want to be able to pay higher wages to our dedicated team of early years educators whilst at the same time maintaining affordable costs for families. However, without significant financial support from the government, the early years sector is going to quickly diminish.”