Teach-Early-Years-14.1

COUNTING COSTS The expansion of funded childcare places a new onus on nurseries to keep up with increased demand from families. The National Audit Office found that 85,000 new places are needed by September 2025, which has put huge financial strain on providers. In a bid to help overcome this, the previous government pledged £100m of capital support to help providers expand their premises. The Childcare Expansion Capital Grant Scheme was to help deliver new places for children aged nine months to three years old, as well as support wraparound provision for primary school-aged children. GILL MCATEER IS DIRECTOR OF EMPLOYMENT LAW AT CITATION FUNDED PLACES: How can nurseries meet demand? In the current landscape, retaining skilled employees is vital T he 2024 expansion of funded childcare hours for eligible children aimed to assist a smoother return- to-work and was celebrated by working parents, employers and campaigners alike – but what about the impact on childcare providers? Gill McAteer, director of employment law at Citation, and Jonathan Broadbery, NDNA’s director of policy, explore the issues. BATTLING HEADWINDS The new 15 hours funded childcare allowance for eligible nine-month to two-year-olds in England and the 30 hours of childcare for three to four- year-olds in all eligible families has provided a lifeline for many, but for nurseries, it has exacerbated already deep-rooted issues. “Staff recruitment and retention has long been an issue within the sector,” comments Jonathan Broadbery. “With rising costs, nurseries have been battling to stay afloat due to business rates, utilities and food costs. With the impact of the most recent Budget announcement on changes to National Insurance, the National Minimum and Living Wages, a single nursery with 18 staff will have to find an extra £47,000 per year. These are expenses that are increasing while funding rates are not keeping up.” “Nurseries must ensure they are well informed about the details of new funding, including eligibility criteria, so they can communicate this information to parents,” stresses Gill McAteer. “Recruitment is expensive, and attracting and retaining the right staff is key to running a successful nursery.” settings to offer the places needed for funded babies and two-year-olds,” he continues. “We even know of nurseries that have taken the financial risk to expand even before their council has decided how they want nurseries to bid for this support fund. The government has made a commitment to supporting parents and delivering on the expansion of funded hours, but this needs to be backed up with the resources required to ensure settings are the best possible learning environments for our youngest children.” The minimum wage hike is adding further fuel to the fire. Government funding for the existing childcare offer is not keeping pace with rising costs, with wage bills up by 14.4% from April 2024 compared with a 4.6% rise in funding rates. In early 2024, 83% of nurseries said their costs were higher than the funding for three- and four- year-old places. Their average shortfall was a staggering £2.36 per hour per child or £1,345 over the year for a 15-hour place. As a result, nurseries continue to close at a time when society needs them most. The double whammy of increased NICs and above inflation increases to wages will make this situation worse. ALLEVIATING PRESSURES Nurseries are seeking to manage these challenges by streamlining recruitment, compliance and workforce management. The priority is to attract staff through targeted strategies, enabling providers to focus on delivering quality childcare while meeting funding obligations and maintaining staff wellbeing. “In order to tackle record-long Jonathan explains, “The fund was not even enough to deliver the expansions required, but the situation has been made worse still as, with one year to go, most local authorities had not decided on their plans or distributed the financial support.” An NDNA investigation showed that nine months after the Grant’s launch, 82.5% of local authorities hadn’t distributed additional funding, and nurseries aren’t getting the support they need, with less than 5% of the £100m distributed to date. “Waiting lists are growing, and lots of nurseries told us that they would need to adapt or expand their 62 Teachearlyyears.com