Government’s “£40 a week saving” claim challenged
By Rachel Lawler
The Alliance has challenged the government’s claims that plans to change early years ratios could result in a £40 a week saving for parents of two-year-olds.
The government’s claim is based on the following calculation:
Staff costs account for 74% of overall costs in early years settings. Moving from a ratio for 1:4 to 1:5 for two-year-olds would cut staff costs by 20%. 20% x 74% = 15%. The average weekly cost of early years places is £265 and 15% of £265 is £40; therefore parents could save £40 per week.
These calculations are based on the assumption that all nurseries and pre-schools are currently working to a 1:4 ratio at all times and that they will move to a 1:5 ratio at all times.
It also assumes that the entirety of savings would be passed on to the parents through lower fees.
However, a recent Alliance survey of more than 9,000 early years providers found that just 51% of providers were delivering two-year-old place at maximum ratios all the rime – so around a half already have the scope to work to more relaxed ratios but choose not to.
The same survey found that just 2% of nurseries and pre-schools believe that parental fees at their setting would lower as a result of changes to ratio rules.
The calculations also assume that all settings have the physical space to be able to increase the number of children they care for and educate, while still complying with legal limits on floor space per child – this is not something the government is consulting on changing.