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By Rachel Lawler

The government has been told to 鈥済et its figures straight鈥� by the Alliance, after representatives from the Treasury made inaccurate comments about funding research.

 

During an oral evidence session of the Treasury Committee鈥檚 childcare inquiry on 31 January, Elizabeth Truss MP, chief secretary to the Treasury and Beth Russell, director general of tax and welfare, claimed that research into the cost of childcare had taken into account the rising national living wage.

 

The DfE-commissioned report was conducted by Frontier Economics and estimated the average cost of delivering a childcare place for three- and four-year-olds to be 拢3.72 per hour.

 

However, the report states that its findings were based on actual salary amounts paid to staff between March and December 2015, when its data was collected. In the few instances where salaries were not reported, Frontier Economics used either the ONS average reported qualification level of the age-appropriate minimum wage instead.

 

The report makes no reference to planned future increases in the minimum wage or national living wage being included in its cost of delivery calculations.

 

Neil Leitch, chief executive at the Alliance, commented: 鈥淲e have long argued that more needs to be done to ensure that funding rates take into account rising delivery costs 鈥� and in particular, increases in staff costs. The suggestion that an hourly funding rate of 拢3.72 will be enough to cover provider costs until 2020 would be laughable if it wasn鈥檛 so serious. 

 

鈥溞掳拿帕喜使偻� across the country are facing a daily struggle to keep their doors open 鈥� the least the government could do is gets its figures straight鈥�

 

During the same debate, Truss also highlighted the average funding rate of 拢4.94 per hour, comparing it favourably with Frontier Economics 拢3.72 per hour average cost. She said that this was evidence that the government is paying 鈥渟ignificantly over the cost for the provision of those childcare places鈥�.

 

The Alliance has described this comparison as 鈥渕isleading鈥�. The average rate of 拢4.94 is paid to local authorities, not providers. This figure includes additional funding including the Early Years Pupil Premium and the supplementary funding for maintained nursery schools.

 

Neil said: 鈥淭he DfE鈥檚 own figures state that the average funding rate for PVI providers is actually 拢4.34 鈥� and this of course varies significantly from area to area, with some providers receiving much less. Given that independent research from Ceeda put the cost of delivering childcare at 拢4.53 back in 2014, it鈥檚 clear that the government is not painting a complete picture of the funding situation.鈥�