A new survey from the Early Years Alliance has found that as a result of the combined impact of NI rises, minimum wage increases and updating charging guidance:
- Nearly six in 10 early years settings in England are likely to cut the number of three-and four-year-old funded places they offer, or opt out of offering funded places for this age group entirely, with a quarter of providers likely to do the same for funded two-year-old places over the next 12 months
- Only a third of providers offering funded two-year-old places for 15 hours a week are planning to extend all these places to 30 hours a week from September (when the entitlement scheme is due to expand), with only around two in five planning the same for funded places for under-twos
- 94% of providers are likely to increase fees for non-government funded hours over the next year, with eight in ten introducing or increasing optional charges
Commenting, Neil Leitch, CEO of the Early Years Alliance said: “These survey findings should set alarm bells ringing across government. At a time when ministers are looking to significantly expand the early entitlement scheme, we have a huge proportion of providers warning that the exact opposite is likely, with many forced to limit funded places or opt out of the offers entirely due to unsustainable financial pressures.
“While we of course recognise the need to ensure clarity and transparency for parents when it comes to additional charges for entitlement places, the fact is that this updated guidance has been implemented against a backdrop of severe and sustained underfunding, which the government has yet to address, or even acknowledge. Add to this the impact of upcoming increases in both National Insurance contributions and the national minimum and living wage, and you have a perfect storm of challenges for early years providers – one that many will not be able to survive.
“If the government is to have any chance of ensuring that families can access the quality, affordable early years care and education that they’ve been promised, then it needs to support the businesses that deliver this. That means ensuring that funding actually meets the cost of delivering high-quality places, both now and in the future, so that providers don’t need to rely on additional charges to keep their settings afloat and are able to withstand changes like the upcoming National Insurance rise.
“It is one thing to recognise the importance of the early years, but it is quite another to deliver the financial and practical support that settings need – and make no mistake, our sector needs it now. We therefore urge the government to work with the sector and ensure that the early years gets the investment it needs to deliver on the promise made to parents – before we reach the point of no return.”
Thank you to everyone who responded to our survey, the results of which will be critical to our ongoing talks with government.
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