Alliance comments on tax-free childcare scheme as Childcare Payments Act receives Royal Assent
18th December 2014
Commenting on the introduction of the new tax-free childcare scheme, Neil Leitch, chief executive of the Pre-school Learning Alliance, said:
“While we welcome any additional support for parents and families accessing childcare, we remain concerned that the tax-free childcare scheme is a short-term solution which fails to address the root cause of rising childcare costs.
“Evidence shows that, when it comes to childcare, demand-side subsidies are of limited use in the longer term. In comparison, sufficient supply-side funding has been shown to be vital not only in helping to lower costs for parents, but also in supporting providers to deliver high-quality childcare in a sustainable way. And yet, despite this, childcare in England remains significantly underfunded - our recently-commissioned research found that government funding only covers four out of every five childcare places offered under the free entitlement scheme.
“It is vital that government addresses this issue as a matter of priority. If they don’t, they will be doing a disservice not only to early years providers, but also the families that they work so hard to support.”
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Notes for editors
- The Counting the cost study, commissioned by the Alliance and carried out by independent research agency Ceeda, tracked the resources expended in delivering 186,712 hours of early years education and childcare for 5,635 funded and non-funded children over a two week period: 23 June to 4 July 2014. Profile data collected in anonymised staff and child registers was linked with detailed records of activity in daily room diaries, completed over this period. The study found that:
- The average hourly cost of providing a funded childcare place for a three or four-year-old was £4.53, compared to an average funding rate of £3.88 - a funding shortfall of 18%, rising to 21% when the cost of unpaid staff hours was taken into account.
- The average hourly cost of providing a funded childcare place for a two-year-old was £5.97, compared to an average funding rate of £5.19 - a funding shortfall of 15%, rising to 18% when the cost of unpaid staff hours was taken into account.
ABOUT THE ALLIANCE
- The Pre-school Learning Alliance is the largest voluntary sector provider of quality affordable childcare and education in England.
- Through direct provision and its membership of 14,000 nurseries, sessional pre-schools and parent and toddler groups, the Alliance supports over 800,000 children and their families in England. The Alliance also develops and runs family learning programmes, offers information and advice, runs acclaimed training and accreditation programmes and campaigns to influence early years policy and practice.
- For information about the Pre-school Learning Alliance, visit our website: