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By Rachel Lawler

 

A third of local authorities say that the 30-hours offer has negatively impacted sustainability in the childcare sector, according to a from Coram Family and Childcare Trust.

 

The also found that a quarter of local authorities believe that the 30-hours offer has led to higher prices for non-funded childcare for three- and four-year-olds.

 

The report recommends that the government regularly reviews the funding rate for early years entitlements to ensure that they meet the true cost of delivering quality childcare.

 

The survey also found that the average cost of childcare has also increased – with 25 hours in a setting, for a child under two, costing parents £127 a week, up 3% on 2018. Childcare costs for children over two has also increased – costing an average of £124 a week, up 4% since 2018.

 

While most local authorities felt there was adequate childcare for children eligible for the three- and four-year-old funding, fewer local authorities felt that there were adequate spaces for two-year-olds entitled to a funded space than last year.

 

Neil Leitch, chief executive of the Alliance, said: “Since current funding rates were set in 2015, early years providers have endured rising wage and pensions obligations, as well as business rate rises, mortgage and rent hikes and countless other cost increases. As such, many have been forced to increase fees just to keep their heads above water, and this has had a particular impact on parents with younger children who aren’t eligible for the funded schemes. 

 

"This issue has only been exacerbated by the introduction of the 30 hours scheme, and local authorities are right to warn that this policy is not only causing prices to rise, but also having a negative impact on the financial sustainability of childcare settings.

 

“Enough is enough. It's time for the government to commit not only to investing properly into the sector, but also reviewing funding level on an annual basis, an Alliance recommendation that has been echoed by the Treasury Select Committee. Without this, prices for parents will continue to rise, and more and more providers will be forced to close their doors for good."